Medicare audit overreach? Doctors think so, but audits aren't going away

Physicians decry the heavy-handed methods of Medicare's "bounty hunters," but Congress and the White House are expanding the program nationwide.

By David Glendinning, AMNews staff. July 7, 2008.

Aggressive tactics, vague charges, interrupted patient care, drained staff resources and administrative headaches. These are some of the problems doctors say they encountered during their experiences with Medicare's newest breed of auditor.

The Centers for Medicare & Medicaid Services this spring wrapped up a three-year pilot program in which "recovery audit contractors," or RACs, scoured physician and hospital claims in three states to find overpayments and to recoup those dollars for Medicare. Thrilled by the project's financial success, lawmakers ordered CMS to expand the program to all 50 states by 2010. The agency plans to choose four national contractors to administer the program this summer. A new round of audits could start right away.

But if Congress doesn't delay the RAC program and make some serious changes, physicians with negative experiences worry that there will be many more stories like theirs.

Jeffrey E. Kaufman, MD, a urologist in Santa Ana, Calif., was one of the first physicians whose Medicare claims were reviewed by a recovery audit contractor.

Last summer, Dr. Kaufman's practice received what he describes as a vague, "Kafka-esque" letter from Atlanta-based auditor PRG Schultz, the RAC for California. It insinuated that he had received roughly $3,000 too much for luteinizing hormone-releasing hormone agonists he administered to patients more than four years earlier. The letter demanded patient medical records to help determine if the charges were accurate.