The tax man cometh to a hospital near you

---in the form of the Medicare recovery audit. As we all know, Medicare’s prospective payment system is really an unspoken provider tax. After a just completed demonstration project CMS has decided it’s time for some tax audits. Based on the pilot project in California, Florida and New York it looks as though most of the audits went in Medicare’s favor:

Approximately 96 percent of the improper payments identified by the RACs in 2007 were overpayments collected from health care providers; the remaining 4 percent were underpayments repaid to health care providers.

Although not all the recovered monies were from prospective payments it appears the
majority, around 85%, were.

Nationwide audits are being implemented this year.