Policy Documents

Primer: Recovery Audit Contractor Program and the “Two Midnight” Rule

Emily Egan –
December 12, 2013

The Recovery Audit (RA) Program exists to detect and correct improper claims to the Medicare program. The contracted firms are paid a portion of their recoveries, so the program delivers savings to the Medicare Trust Fund at no cost. However, Recovery Audit Contractors (RAC) are currently being weakened by the Centers for Medicare and Medicaid Services (CMS) through several policy changes and are facing a transition period between contracts that will result in a limited scope of recoveries. A solution that patients and hospitals can live with would not necessitate a moratorium on audits for 6 months or longer, and would allow the auditing firms to continue their appropriate oversight of the Medicare program.