In January 2010, after a successful six-state, three-year demonstration project, Congress gave the Centers for Medicare and Medicaid Services authority to contract with private-sector recovery audit contractors in order to identify and recover improper payments from providers who submit claims to Medicare under parts A and B.

These auditors are paid on a contingency basis only after they have successfully recovered overpayments and returned them to the Medicare Trust Fund. Between fiscal 2012 and 2014, the recovery audit program returned between $2 and $3 billion to the Medicare Trust Fund annually. Total recoveries since its inception are $11 billion. The law also mandates that CMS collect data on the program’s performance and report it to Congress (and the public) on an annual basis.