Speaker John Boehner
H-232 The Capitol
Washington, DC 20515

Dear Mr. Speaker,

We greatly appreciate the bipartisan effort being made to permanently resolve the temporary sustainable growth rate (SGR) formula.  After enacting 17 patches over a 20-year period to spare doctors from taking deep cuts to Medicare reimbursements, we agree that it is long past time to enact structural reforms to the Medicare program.  The road to consensus on these vital changes has been arduous, but if properly implemented they will yield savings over the long haul, bring new efficiencies to the program, and perhaps most importantly, break the political logjam that has kept both sides of the aisle so far apart on the critical need to address entitlement reform in general.

Given how sensitive and grueling the task has been, we urge you to resist making the negotiations needlessly more complicated and prevent the SGR bill from becoming a vehicle for undermining the Recovery Auditing Contractor (RAC) program.

By conducting post-payment audits on Medicare claims and recovering overpayments on behalf of the Medicare Trust Fund, the RAC program has been one of Medicare’s most successful and effective waste-fighting tools. It has identified and recovered $9.7 billion since its implementation in 2010, at no cost to taxpayers. The mission of the RAC program wholly coincides with your efforts to enhance and strengthen the Medicare program’s integrity. 

Unfortunately, during last-minute, behind-the-scenes maneuvering related to the last “doc fix” negotiations in October, 2014, a suspension of the RAC program was added, which means that by the time the current SGR patch expires on March 31, 2015, this essential initiative will have been sidelined for a total of 18 months.  During those 18 months, the Medicare program will have lost an average of $1 billion per quarter in improper overpayments to providers. Hanging a further suspension in the SGR legislation would be an extreme disappointment to taxpayer advocacy groups such as ours, who otherwise support many of the reforms contained in the bill. 

The suspension is bewildering in light of the RACs’ proven track record of recovering billions of dollars for taxpayers and the fiscally unsustainable Medicare Trust Fund. The RAC program helped lead to a reduction in the Medicare improper payment rate, which dropped from 10.8 percent in fiscal year (FY) 2009 to 8.5 percent in FY 2012. However, since the RACs were sidelined by CMS, the Department of Health and Human Services reports that the rate of improper payments has risen to 12.7 percent in FY 2014, which equates to $46 billion.  According to the 2014 Medicare Trustees report, Medicare spent $7.1 billion more than it received in income in 2013.  The Trustees called the RAC program “an important initiative in CMS’s goal to reduce improper payments and pay claims accurately.”

On behalf of the millions of members and supporters of the organizations listed below, we urge you to prevent the SGR bill, or any other legislation coming before the House, from creating further impediments to the RAC program.  It does not make sense for the most effective and practical tool taxpayers have ever had to reduce wasteful spending in Medicare to remain idled – especially when there is overwhelming bipartisan support to address improper payments across the government and growing interest in enacting long-term structural reforms to Medicare.  

Sincerely,

Tom Schatz
President, Council for Citizens Against Government Waste 

Pete Sepp
President, National Taxpayers Union