Medicare Part D: Changes Needed to Improve CMS's Recovery Audit Program Operations and Contractor Oversight

In 2014, the federal government spent$58 billion on Medicare Part D, the voluntary, outpatient prescription drug coverage program. An estimated$1.9 billion of this total was improper paymentsincluding overpayments or underpayments that may be due to errors, such as the submission of duplicate claims for the same service. In January 2011, CMS began a RAC program in Part D that was intended in part to identify and recoup improper payments, as required under the Patient Protection and Affordable Care Act. The RAC is paid a contingency fee from amounts recovered. GAO was asked to review CMSs Part D RAC program implementation, oversight, and results. GAO examined(1) how CMS has implemented the Part D RAC program and any challenges it faced during implementation; (2) the extent to which CMS has overseen the RACs audit activities; and (3) the results of the RACs work to date and any challenges CMS and the RAC faced in identifying and collecting improper payments. To do this, GAO analyzed the RAC contract and audit documents, and federal statutes and regulations on Part D and federal contracting. GAO also interviewed CMS and RAC officials