CMS helping states hire Medicaid audit contractors

The Centers for Medicare and Medicaid Services is about to publish a new rule to help states meet a requirement to hire contractors to audit Medicaid payments and reduce fraud under the new health reform law.

The proposed rule for the Medicaid Recovery Audit Contractors program is expected to be published in the Federal Register on Nov. 10, but was made available in the advance review section of the register Nov. 5.

Under the health reform law, states must establish Medicaid recovery audit contract (RAC) programs by Dec. 31.

In the programs, contractors will audit Medicaid payments to doctors and hospitals to identify and correct overpayments and underpayments. The new program will operate similarly to an existing audit contracting program under Medicare, in which the contractors are paid on a contingency fee basis.

“We are using many of the lessons that we learned from the Medicare RAC program in the development and implementation of the Medicaid RACs, including a far-reaching education effort for health care providers and state managers,” Donald Berwick, CMS administrator, said in a news release.

The Affordable Care Act provides $350 million over 10 years to fight fraud in the health care system through the Health Care Fraud and Abuse Control Account.

The law increases penalties for criminal activity, enhances screenings and enrollment requirements, encourages increased sharing of data across government, expands overpayment recovery efforts, and provides greater oversight of private insurance.