The Recovery Audit Contractor Demonstration Program

The Recovery Audit Contractor demonstration program was created to study whether or not using Recovery Audit Contractors is a productive way to make sure correct payments are being made by Medicare to providers, and whether or not this method will save Medicare money and further protect the Medicare Trust Fund.

Recovery Audit Contractors, or RAC, are companies hired by Medicare to find incorrect payments made by Medicare to health care providers and suppliers. Incorrect payments can, of course, come in a number of forms, including claims erroneously submitted and paid twice as well as, sometimes, underpayments by Medicare. The RAC program will catch and correct both, although it is ultimately intended to help Medicare by recovering money lost by overpayments.

While you may get your money back if a RAC review finds you personally overpaid, the Recovery Audit Contractor Program will not put any other money directly back into your pockets. Even if RAC companies are able to recover lost funds for Medicare, this money won’t be shared directly with beneficiaries. Your Medicare benefits also will not change due to the RAC program.

However, the RAC program does benefit you indirectly. For instance, it saves taxpayer dollars. It also protects the Medicare Trust Funds, which will help future generations as well.

Currently, the Medicare RAC program is in California, Florida, New York, Massachusetts, South Caroline, and Arizona. The Centers for Medicare & Medicaid Services expect RAC to be in use throughout the country by 2010.