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S-4898Senate2026-06-24Health

Medicaid RAC Improvement Act of 2026

YourVoice.Now Summary

Transparency & Accountability

Ends state exemptions from Medicaid overpayment audits after 2028 — and extends audits to private plans, four years back.

Transparency & Accountability

Medicaid overpayment audits in every state — no exemptions after 2028

Federal law already tells states to hire contractors who find and recover Medicaid overpayments, but a state can ask to be excused. Under this bill, no state could be excused after December 31, 2028.

Audits of private Medicaid plans' payments — required by 2028

Many states pay private health plans to run Medicaid, and those plans' claims would now be audited too. A plan could check its own claims first for up to 18 months, and then the state's auditor could step in.

How far back Medicaid audits reach — four prior years

Starting 120 days after the bill becomes law, each year's audit could check payments made in that year and in the four years before it.

Yearly state-by-state report on Medicaid overpayments — starting 2027

By December 31, 2027, and every year after, the federal health agency would tell Congress how much each state recovered and underpaid, and how often appeals settled. It would also list each state's audit limits and the reasons for them.

More about this bill

Most people on Medicaid would see no direct change. The change falls on the doctors, hospitals, and private health plans that Medicaid pays. Federal law already tells each state to hire auditors who find Medicaid overpayments and get the money back. The auditors are paid only from what they recover. Today a state can ask to be excused from this rule. Under this bill, those exemptions would end after December 31, 2028. The audits would also reach further. Auditors would check claims paid by the private health plans that run Medicaid in many states. States would have to show by January 1, 2028, that their plan contracts allow this. Each year's audit could look back four years, starting 120 days after the bill becomes law. From December 2027, the federal health agency would report to Congress every year. The report would show, state by state, how much money came back and how much was underpaid. The agency would also study why some states have no audit program. Then it would run a five-year test of ways to help them start one.

Congressional Summary

Medicaid RAC Improvement Act of 2026 This bill establishes additional requirements for and expands the scope of Medicaid Recovery Audit Contractors (RACs). RACs identify improper Medicaid payments to providers, collect overpayments, and reimburse underpayments. Current law requires state Medicaid programs to establish a RAC program; however, states may apply to the Centers for Medicare & Medicaid Services (CMS) for an exception. The bill prohibits the CMS from granting exceptions after December 31, 2028. The CMS must inform states that have an approved RAC exception that the exception will not be renewed after this date, and it must also inform these states of the current expiration date of their excepted status. The bill also expands the scope of RACs to include a review of payments to Medicaid managed care organizations, prepaid inpatient health plans, and prepaid ambulatory health plans. In addition, the bill expands the period of review for RACs to include the four-year period prior to the fiscal year at issue. Finally, the bill establishes reporting requirements relating to the effectiveness of RACs, including annual reports with state-specific data on collected overpayments. The CMS must also conduct a study and establish a related demonstration program to increase the number of states with a RAC program.

Details

Congress
119th
Chamber
Senate
Status
summarized
Action
Introduced in Senate
Action Date
2026-06-24
Date Added
2026-10-08
Source
Congress.gov →

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