Medicare touts audit plan's success as doctors decry "bounty hunters"

Physicians say the hassle factor is far more costly than the dollar amounts collected.

By David Glendinning, AMNews staff. Dec. 18, 2006.

Washington -- Federal officials are singing the praises of a Medicare auditing program, heightening the chances that the government will expand it to other states. But physicians have described the initiative as an aggressive form of bounty hunting.

The Centers for Medicare & Medicaid Services in November issued its first progress report on Medicare's recovery audit contractors, or RACs. The three-year pilot project uses private auditing firms to comb through physician, hospital, nursing home and other claims to find instances in which the government paid too much.

Since it launched in the spring of 2005, the program has identified about $290 million in overpayments. Only about $18 million was related to physician services, which are in a group that also includes ambulance and laboratory services, according to CMS. Medicare already has recouped more than $60 million overall and has initiated steps to collect the rest.

CMS and at least one lawmaker said the report was strong evidence that the experiment is cost effective and working as planned.

"Congress owes it to the taxpayers to ensure that their hard-earned dollars are spent appropriately," said House Ways and Means Committee Chair Bill Thomas (R, Calif.). "For years, we have suspected that Medicare has too many overpayments. ... This demonstration program has already exposed several hundred millions of dollars in overpayments, and we've only seen the tip of the iceberg."