The auditors come to a doctor’s office, look at a small sample of charts, decide he is “upcoding,” multiply the upcoded percentage by total number of charts and extrapolate back to his enrollment date in Medicare, which may have preceded enactment of the regulation. They then add triple damages and charge the doctor with some outrageous sum of money – sometimes over a million dollars. Of course he doesn’t have it, and malpractice insurance doesn’t cover it, so they cut him a deal.
“Doctor, we’ll drop your fine from a million to a cool 100K, but you have to sign this affidavit that you agree to keep silent as to everything that happened to you,” the federal Medicare extortionists explain. “Of course we will print in the news that you paid us for defrauding Medicare, because that is public record. But if you speak out, the full fee goes back into force.”
Ninety-five percent of doctors sign. The ones that don’t often are slammed with criminal charges and some go to jail. The RAC income is strictly a percentage of recouped money. And, adding to the whole wise guy flavor of the thing, if your office manager has a beef with you and turns you in, he or she can be paid 10 percent of the reclaimed money.
Every doctor in America runs scared. Just like Stalin using random terror to cower the average Russian, this is a very effective technique for controlling costs. Many doctors, to be safe, tend to undercode to avoid facing the RAC.