On March 10, 2010, President Obama issued a memorandum to all heads of executive departments and agencies regarding finding and recapturing improper payments.  As part of continuing efforts to combat fraud, waste and abuse throughout the government, President Obama is expanding the the use of  “Payment Recapture Audits.”    Payment recapture audits are what recovery audit contractors (RACs) do to earn their contingency fees.  As defined in the memorandum,  a Payment Recapture Audit is a “process of identifying improper payments paid to contractors or other entities whereby highly skilled accounting specialists and fraud examiners use state-of-the-art tools and technology to examine payment records and uncover such problems as duplicate payments, payments for services not rendered, overpayments and fictitious vendors.”  The memorandum refers to the RAC demonstration project stating: ” One approach that has worked effectively is using professional and specialized auditors on a contingency basis, with their compensation tied to the indentification of misspent funds.”

Given that the RAC program is already established and functioning for CMS, the directives of this memorandum may not require anything additional for the Medicare and Medicaid programs.  The memorandum directs the Office of Management and Budget to provide guidance within 90 days regarding what actions executive departments and agencies of the government must take to fulfill the requirements of the memorandum.  At that time it will be clearer whether this new initiative has implications for further expansion of CMS’ current RAC program.

This entry was posted on Thursday, March 11th, 2010 at 1:46 pm by hpwilson and is filed under Updates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.