CMS Announces New Recovery Audit Contractors

On October 6, 2008, the Center for Medicare & Medicaid Services announced four new permanent Recovery Audit Contractors (“RACs”).

The RACs are created by the Tax Relief and Health Care Act of 2006 and are charged with the responsibility of helping identify improper Medicare payments nationally. CMS first employed a demonstration project utilizing RACs in Arizona, California, Florida, Massachusetts, New York, and South Carolina, which resulted in $900 million in overpayments being returned to Medicare and nearly $38 million in underpayments to health care providers from 2005 – 2008.

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