OIG: RAC Program Lacks Sufficient Fraud Training

A report from the Department of Health and Human Services Office of the Inspector General found that recovery audit contractors are not sufficiently trained to accurately report potential fraud to the Centers for Medicare and Medicaid Services.

The report evaluated data from the RAC demonstration period, which was from March 2005-March 2008. In the three-year period, only one RAC referred two cases of potential fraud to CMS, but did not provide specific provider referrals. A second RAC notified CMS of numerous claims involving improper payments, and the third did not refer any cases of potential fraud, according to the report.

It was also found that CMS did not provide any formal training to the RACs on the identification and referral of potential fraud. CMS did provide a presentation about healthcare fraud, and two of the three RACs provided informal training on the topic. CMS is planning to provide permanent RACs with further education on fraud.

The OIG made the following recommendations to CMS to help RACs better identify and refer potential fraud:

• Conduct follow-up to determine the outcomes of the two referrals made during the demonstration project;
• Implement a database system to track fraud referrals; and
• Require RACs to receive mandatory training on the identification and referral of fraud.

Read the OIG's report on the RAC program (pdf).