The pilot demonstration project

CMS has already announced the expansion of its program from three states to an additional nine states, with intentions for nationwide RAC auditing to take place by spring 2008, three years ahead of schedule. The pilot demonstration project, which began in March of 2005, targeted the three states with the highest Medicare expenditures (New York, Florida and California), and has proven highly successful from the financial perspective of CMS and the RACs. The CMS RAC Status Document for FY 2006 reflects $303.5 million as total improper payments identified by the RACs for FY 2006, with a high percentage being linked to inpatient hospital claims.[1].

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