CCAGW Opposes Rep. Graves’ Medicare Oversight Bill, Urges Members Not to Co-Sponsor

H.R. 1250 a “Direct Assault” on Successful Recovery Audit Contractor Program

WASHINGTON--()--Today, Council for Citizens Against Government Waste (CCAGW) President Tom Schatz sent a letter to the U.S. House of Representatives strongly urging members to neither co-sponsor nor vote for Rep. Sam Graves’ (R-Mo.) legislation H.R. 1250, the Medicare Audit Improvement Act of 2013, which would gravely undermine the most effective oversight tool at taxpayers’ disposal to combat rampant improper billing in the Medicare fee-for-service program, the Recovery Audit Contractor (RAC) program. RACs have recovered $7.6 billion in improper overpayments since fiscal year (FY) 2010 and extended the life of the troubled Medicare Trust Fund. The CCAGW letter reads in part:

“H.R. 1250 is a direct assault on Medicare’s Recovery Audit Contractor (RAC) program, which is one of the most successful oversight tools taxpayers have ever had. Between fiscal year (FY) 2009, when the nationwide rollout of the RAC program began, and FY 2012, improper payment rates in Medicare fell from 10.8 percent to 8.5 percent. However, in its FY 2013 Financial Report, the Department of Health and Human Services documented that Medicare improper payment rates are once again above 10 percent.

“If enacted, H.R. 1250, would substantially damage the RAC program. Despite the bill’s purported intent to relieve the cost of compliance for some of the nation’s hospitals, this legislation will instead allow CMS to turn a blind eye toward chronic, widespread shoddy billing practices by Medicare providers and relax, rather than strengthen, oversight of Medicare billing practices.

“The bill includes a provision that would only allow audits when there is an estimated billing error rate of more than 40 percent. It is difficult to believe that members of Congress would support legislation that allows Medicare providers to bill improperly, so long as they do not hit an error rate over 40 percent. This astonishing stipulation is tantamount to sanctioning a 60 percent ‘success’ rate, the equivalent of a failing grade in school. The error rate provision alone would cause Medicare to hemorrhage tens of billions of dollars in improper payments. Taxpayers can and should expect a higher standard of performance from hospitals and other Medicare providers. Indeed, there should be no minimum error rate before Medicare auditors are allowed to investigate potential waste, fraud, and abuse.

“The bill’s sponsors have argued that the program is burdensome on hospitals and have included a cap on the number of medical records a RAC may request from a healthcare provider. However, RACs are the only post-payment program integrity contractors that already are subject to such a cap, which is a mere 2 percent of a hospital’s Medicare claims volume.

“The consolidation provision would impose the 2 percent cap collectively across all audit program integrity efforts, virtually eviscerating the RACs’ ability to review medical records for improper payments, the key to identifying waste, fraud, and abuse in the most cost-effective manner.

“Furthermore, H.R. 1250 mandates additional, unnecessary reporting requirements and penalties on RACs, even though they are already required to be the most transparent and accountable of CMS’ post-payment auditors. The bill would penalize the RACs for overturned determinations. Yet RACs are compensated on a contingency basis, operate at no cost to the taxpayers, and receive no compensation for any decisions that are overturned on appeal. According to CMS, RACs have an accuracy rating of more than 90 percent, and only 3 percent of their improper payment determinations were overturned on appeal in FYs 2010 and 2011.

“Since 2001, Congress has overwhelmingly approved three separate bills to help eliminate improper payments government-wide. H.R. 1250 undermines the intended effects of these laws. I urge you to oppose any efforts to roll back the highly effective RAC oversight program, which has already collected $7.6 billion in overpayments since FY 2010 and helped to extend the life of the Medicare Trust Fund.”

To view a list of current co-sponsors for H.R. 1250, click here.

CCAGW representatives are available for interviews regarding the RAC issue. To book an interview with CCAGW President Tom Schatz or CCAGW V.P. for Policy & Communications Leslie K. Paige, please contact Alexandra Booze at (202) 467-5300 or abooze@cagw.org.

The Council for Citizens Against Government Waste is the lobbying arm of Citizens Against Government Waste, the nation’s largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.

Contacts

Council for Citizens Against Government Waste (CCAGW)
Alexandra Booze, 202-467-5318
or
Leslie K. Paige, 202-467-5300

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Contacts

Council for Citizens Against Government Waste (CCAGW)
Alexandra Booze, 202-467-5318
or
Leslie K. Paige, 202-467-5300