Recovery audits help government save $17.6 billion

According to a recent announcement by the Office of Management and Budget (OMB), wasteful spending and improper payouts decreased by $17.6 billion in 2011 thanks to recovery audit programs and other initiatives pertaining to Medicare, Medicaid, Pell Grants, and food stamps.

To further reduce the rate of Medicare and Medicaid duplicate payments, waste and fraud, Department of Health and Human Services Secretary Kathleen Sebelius announced a plan to expand the use of recovery audit contractors.

RACs are charged with tracking down and recovering improper payments. In the future, private companies will be permitted to screen particular hospital payments prior to disbursement, preventing incorrect payouts from occurring in the first place.

Additionally, the department plans to address outdated hospital billing systems that are a main cause of errors, change its payment approval policy for medical equipment with high error rates and collaborate with states on fraud detection measures.

According to Healthcare IT News, OMB director Jack Lew said the use of technology was instrumental in realizing the savings.  

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