It is rare for Congress to identify rampant fraud and actually do something to prevent it. That’s what the Recovery Audit Contractor (RACs) Program in Medicare is all about. Like most anything that works, the program has become a target by the hospital. The American Hospital Association (AHA) has lobbied Congress, the White House and has even press the courts to end the RACs program.

RACs was designed to identify and correct Medicare improper payments and has become the bane of the existence of the hospital lobby, the chief beneficiary of improper payments from Medicare. Unlike other anti-waste programs, RACs has been so effective it has become a target of lobbyists representing the hospital industry. Since its inception, the RACs program returned an incredible $8.9 billion to the Medicare Trust Fund and in the past year, the program identified and returned nearly $4 billions alone.

Rather than celebrate and continue to grow a program successfully reducing waste, fraud and abuse in government, members of both parties have sought to scuttle the program. The reason? Hospitals are the chief beneficiaries of an estimated $50 billion a year in overpayments and they don’t want to pay it back.

The American Hospital Association represents some of the providers that have over-billed taxpayers hundreds of billion and been leading the charge scale back the program.From the First Quarter of 2013 to the Third Quarter of 2014 at the American Hospital Association spent $33.8 million lobbying (not including grassroots activities). That’s an average of $53,000 per day–much of it focused on gutting RACs.


Tax Cuts Now!

Evidence of the pressure campaign became apparent back in 2012 when Rep. Sheila Jackson Lee (D-TX) intervened with federal officials sought to block payments to a Houston’s Riverside General Hospital due to evidence that the hospital billing Medicare for patients it never treated. Ms. Lee contacted Marilyn Tavenner, the head of the Medicare program demanding her agency back down. Weeks later, Ms. Tavenner instructed deputies to restore most payments to the hospital even as the agency was cooperating in a criminal investigation of the facility. “These changes are at the direction of the Administrator and have the highest priority,” a Medicare official wrote to investigators.

Last year, AHA was able to secure a moratorium on new RAC investigations from the Obama Administration. But even that isn’t’ enough. The hospitals have sued the government demanding to be repaid for funds revoked or withheld while the RAC program was operating and seeking to further gut the RAC program. Late last month, a federal court tossed a lawsuit from the American Hospital Association (AHA) against the Department of Health and Human Services seeking to expedite appeals claims that have been backlogged. While sympathetic to the bureaucratic morass at HHS, the court noted that the “true aim” of the suit was to void or scale back the recovery audit contractors (RACs). The AHA has said the RACs should be suspended until the backlog is cleared up.

Politicians love to promise they will eliminate waste, fraud and abuse in government spending, especially Republicans, but as we have seen with the RACs program, they don’t have the intestinal fortitude to stand up to the likes of Sheila Jackson Lee. [mc_name name=’Rep. Sam Graves (R-MO)’ chamber=’house’ mcid=’G000546′ ] (R-MO), has even introduced legislation seeking to further undermine the RACs program by placing a hard cap on additional document requests that Medicare auditors demand from providers.

RACs is an effective tool in weeding out waste. Congress should be demanding its reinstatement rather than doing the bidding of those who benefit from the fraud.