CMS ramps ups fraud, waste prevention; launches national RAC program

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The Centers for Medicare & Medicaid Services (CMS) has initiated the first of several aggressive new steps to find and prevent waste, fraud and abuse in Medicare with the launch of a national recovery audit contractor (RAC) program.

“By enhancing our oversight efforts we can better ensure that Medicare dollars are being used to pay for equipment or services that beneficiaries actually received while protecting them and the Medicare trust fund from unscrupulous providers and suppliers,” said CMS Acting Administrator Kerry Weems.

The agency is consolidating its efforts with new program integrity contractors that will look at billing trends and patterns across Medicare, focusing on companies and individuals whose billings for Medicare services are higher than the majority of providers and suppliers in the community. CMS said it is also shifting its traditional approach to fighting fraud by working directly with beneficiaries by ensuring they received the durable medical equipment or home health services for which Medicare was billed and that the items or services were medically necessary.

Furthermore, CMS will tackle fraud and abuse in home health agencies in Florida and suppliers of durable medical equipment, prosthetics and orthotics (DMEPOS) in Florida, California, Texas, Illinois, Michigan, North Carolina and New York.  

For claims not reviewed before payment is made, CMS is implementing further medical review of submitted DMEPOS claims by one of the new RACs. The RACs review paid claims for all Medicare Part A and B providers to ensure their claims meet Medicare statutory, regulatory and policy requirements and regulations. If the RACs find that any Medicare claim was paid improperly it will then request repayment from the provider if an overpayment was found or request that the provider is repaid if the claim was underpaid. The new national RACs can be found at