Sponsor
Lloyd K. Smucker
Representative · R-PA
Representative · R-PA
The bill strengthens Medicare program integrity by funding and incentivizing prepayment reviews to reduce improper payments, but does so at the cost of increased administrative burden and payment delays for providers and potential access or fairness and trust‑fund impacts for beneficiaries and taxpayers.
Medicare beneficiaries and taxpayers: prepayment reviews will prevent erroneous Part A/B claims before payment, reducing improper payments and preserving program funds.
Centers for Medicare & Medicaid Services and state governments: the statutory funding mechanism and payment incentives create predictable resources and motivation to implement and oversee prepayment activities, enabling earlier error detection and reducing reliance on costly post‑payment recoveries.
Hospitals, health systems and taxpayers: incentivizing earlier detection of billing errors can shorten recovery and audit cycles and improve long‑term program integrity.
Hospitals and providers: increased prepayment denials and administrative burden can slow reimbursements, worsen cash flow, and require more appeals and staffing to manage reviews.
Medicare beneficiaries: valid claims held for prepayment review could face delayed payments or disruptions in access to care.
Taxpayers and Medicare beneficiaries: funding RAC payments via transfers from the HI and SMI Trust Funds reduces resources available for benefits or places additional pressure on trust fund balances, risking future benefit impacts.
Based on analysis of 2 sections of legislative text.
Allows RACs to conduct Medicare prepayment reviews and funds RAC payments from HI and SMI trust fund transfers tied to prevented improper payments.
Authorizes Medicare recovery audit contractors (RACs) to perform prepayment reviews of Part A and Part B claims and sets up a payment and funding system to compensate RACs for preventing improper payments. The bill requires the Secretary of HHS to create a payment methodology that rewards timely, accurate prevention without creating perverse incentives, to allocate funding transfers from the Hospital Insurance (HI) and Supplementary Medical Insurance (SMI) Trust Funds to CMS program management, and to issue implementing regulations within one year describing the payment rules and how savings are calculated.
Official title: To amend title XVIII of the Social Security Act to authorize the Secretary of Health and Human Services to enter into contracts with recovery audit contractors to perform prepayment reviews under the Medicare program.
Introduced May 13, 2026 by Lloyd K. Smucker · Last progress May 13, 2026