President Obama signed a presidential memorandum on March 10 directing all federal departments and agencies to “expand and intensify their use of payment recapture audits under their current authority.” In other words, don’t wait for more legislation to get passed. The memorandum also announced the President’s support for the Improper Payments Elimination and Recovery Act, which is a new bipartisan legislation (hey, it could happen) before Congress intended to expand the ability of government agencies to fund future audits with recaptured payments. That would alleviate the need to go back to the well for more funding, assuming they are successful in “recapturing” revenue from improper payments, which is certainly not a bad idea and rather likely to happen, given the success of other such programs, such as the Recovery Audit Contractors programs.
New Term Used
The administration has chosen to use a new phrase, Payment Recapture Audits (PRA), to describe these new efforts. Nevertheless, the memorandum specifically defines PRAs as virtually identical to Recovery Audits, which have already been defined in previous OMB documents, specifically Appendix C to Office of Management and Budget Circular A-123.
PRAs are “investigations in which specialized private sector auditors use cutting-edge technology and tools to scrutinize government payments and then find and reclaim taxpayer funds made in error or gained through fraud. These auditors can be compensated based on the amount of improper payments they identify and are reclaimed – providing a powerful incentive to find every error.” That is, these new programs will be just like the RACs, and be what the AMA has already termed, “draconian, time-consuming, and devoid of efforts to improve the Medicare system.”
Going Beyond Fee-for-Service
In November 2009, the President issued Executive Order 1350, on Reducing Improper Payments. The order focused on both reducing improper payments and eliminating waste in federal programs, said to total $98 billion in Fiscal Year 2009 alone. However, using reclaimed funds to pay for “recapture audits” was only possible for programs such as the Medicare Fee-for-Service program payments, but not for government contracts at the 20 out of 24 major government agencies doing more than $500 million in government contracting (including grants and other forms of federal benefit payments to state and local governments, colleges, universities, banks, and non-profit organizations). The memorandum now allows all those payments to be audited in this way.
How Many Programs Might We Expect to See?
We don’t need to tell you that there are lots of agencies and departments that regulate healthcare providers — and possibly therefore audit said providers. Have you ever counted them? We made an attempt, just sticking to the federal ones…
Here’s the list we came up with:
- U.S. Congress
- U.S. Supreme Court
- Federal Circuit Courts
- HHS/CMS
- OIG
- FDA
- OSHA
- CDC/NIOSH
- HHS/HRSA
- FCC
- FTC
- EPA
- IRS
- DEA
- FAA
- SEC
- Dept of Justice
- Dept of the Treasury
- Federal Bureau of Investigation
- Department of Labor
- Department of Transportation
- Nuclear Regulatory Commission
- The Joint Commission
- Provider Reimbursement Review Board
- HHS Organ Procurement Organizations
- CMS Home Health Agency
- Medicare Integrity Program Contractors
- Recovery Audit Contractors
- DME Regional Contractors
- CMS Intermediaries
- CMS Carriers
- CMS MACs
… and we’re sure this is not an exhaustive list, even just for the Fed.
