What is RAC?
The RAC(s)-Recovery Audit Contract will pursue the identification of Medicare claims which contain non-MSP improper payments for which payment was made or should have been made under part A or B of title XVIII of the Social Security Act. In 2006, Section 302 of the Tax Relief and Health Care Act made the Recovery Audit Contractor (RAC) program permanent. It is to be in place in all 50 state and Puerto Rico no later than 2010. The stated goal of the recovery audit program is to identify improper payments made on claims of health care providers provided to Medicare beneficiaries. These may be either overpayments or underpayments. A demonstration program in California, Florida, and New York was deemed successful and as a result Congress made permanent the RAC program. The demonstration in those 6 states resulted in the return of over $900 million in overpayments to the Medicare Trust Fund between 2005 and 2008 while nearly $38 million in underpayments was returned to health care providers
