Subscribe to RSSThe Office of the Inspector General (OIG) issued a report in February 2010 called Recovery Audit Contractors’ Fraud Referrals. The purpose of the report was to conduct an in-depth study of: 1) the extent to which RACs referred instances of potential fraud to CMS during the three year demonstration and 2) the extent to which CMS provided training to the demonstration RACs and the permanent RACs regarding identifying and referring potential fraud. The results of the report indicate, more than anything, that the OIG wants the RACs to step up their fraud referrals.
Making it clear throughout the report that it is not the RAC’s responsibility to review claims for fraudulent activity (just improper payments), RACs are responsible for referring any instances of potential fraud they come across to CMS. The OIG expressed concern that the RACs may have a disincentive to refer cases of potential fraud because they do not receive a contingency fee for cases that result in a fraud determination.
During the three year RAC demonstration project there were only two referrals of potential fraud made by one of the RACs.. Considering close to a billion dollars in overpayments were identified during the three year demonstration project, that certainly is not many referrals. Although the referring RAC provided the letters it had sent to CMS, CMS reported they had not received any referrals at all during the demonstration project. The OIG has asked them to follow up on those two referrals.
The OIG also found that no education was provided to the demonstration RACs regarding identifying and referring fraud. That may have been part of the reason the fraud referrals were so low. During the current RAC program, CMS indicates that a presentation on fraud has been given to the four permanent RACs and more education is planned, including a presentation by the OIG in January 2010.
The OIG’s recommendations, based on the results of the study were for CMS to: 1) follow-up on the two fraud referrals made during the demonstration; 2) develop a database to track RAC fraud referrals; and 3) provide training on the identification and referral of fraud to the permanent RACs.
So what does this all mean? Given that the OIG spent time and resources conducting this study, clearly it is interested in using the RACs as a source of fraud identification. As stated in the report, the RACs have to be able to identify fraud in order to refer it, thus the emphasis on providing more fraud education to the RACs. The RACs still do not have a monetary incentive to refer potential fraud to CMS but given the OIG focus and the RACs’ need to do a good job in order to maintain their contracts, it is likely the RACs will make more fraud referrals in the future.
To read the OIG report, click here.
