Proposed legislation may offer some relief from the threat of recovery audit contractors

From international law firm Arnold & Porter LLP comes a timely column that provides views on current regulatory and legislative topics that weigh on the minds of today’s physicians and health care executives.For any physician practice (or any other provider, for that matter) that has been a target of the Recovery Audit Contractor (RAC) program, proposed legislation introduced by Congressman Sam Graves, R-Mo., offers some hope, or at least a modicum of relief. RACs operate under a contract with the Medicare program to identify potential overpayments as well as underpayments. Despite widespread criticism of the overly aggressive position taken by the RACs in identifying alleged overpayments — driven, no doubt, by the fact that RACs are paid a “bounty,” ie, a percentage of their recoveries — the RAC program has survived largely because it has returned significant funds to the Medicare program: more than $3 billion in FY 2013 alone. While the criticism has led to some reforms (such as requiring RACs to return any monies paid as a result of overpayments identified but later reversed on appeal), the bounty system has continued to encourage aggressive behavior on the part of the RACs and criticism on the part of the provider community.