Medicare recovery audit contractors (RAC) receive a contingency fee of 9% – 12.5% of any overpayment they find but must return that money when a determination is overturned on appeal. Physicians and hospitals have a record of success when appealing RAC overpayment decisions, according to an analysis by the Centers for Medicare & Medicaid Services (CMS) for fiscal 2010. The Medicare agency reported that:

• 8,449 determinations, or 5% of all cases, were appealed by physicians and other health professionals in 2010.
• 3,902 cases were overturned in the doctor’s or other health professional’s favor, which represented a 46% success rate.
• $2.6 million in recoveries was returned to physicians or other health professionals as a result of appeals.

The moral of the story, “Don’t give up on your unpaid claims to Medicare”. When you disagree with Medicare, appeal your claims with justification.