On July 9, 2014, the United States Senate Special Committee on Aging released a report titled “Improving Audits: How We Can Strengthen the Medicare Program for Future Generations.” Among other recommendations, the report suggests compensating Recovery Audit Contractors (RACs) based on their success in reducing the rate of improper payments, instead of paying them based only on the amount of improper payments identified.

The committee report was released in conjunction with a roundtable discussion hosted by the Senate Special Committee on Aging on July 9. Roundtable witnesses included representatives from Connolly Healthcare (a RAC), Dignity Health, and the American Hospital Association.

The report expresses concern that CMS’s strategy to reduce improper payments is aimed at recovering improper payments that have already occurred, rather than a proactive strategy to prevent errors. In addition, among other things, the report recommends that CMS should consolidate post-payment review activities, assess the reliability of data contained within the RAC Data Warehouse, strengthen its review of contractor error rate reduction plans, ensure that local coverage decisions do not create inconsistent access to care for beneficiaries, review the effectiveness of the pre-payment review processes, and emphasize provider education to reduce improper payments.

To view the full report, click here. To watch a recording of the roundtable and read witness testimony, click here.