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.

Overview

HR 8804 (119th Congress) aims 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.

• Purpose: Expand the use of recovery audit contractors (RACs) to conduct prepayment reviews in Medicare, with the goal of detecting and reducing improper payments before claims are paid.
• Sponsor: Primary sponsor not listed; co-sponsor is Lloyd Smucker.
• Action history: Introduced in the House on May 13, 2026; referred to the House Ways and Means Committee and the House Energy and Commerce Committee for consideration.

Key Provisions (as described)

• Authority to contract with RACs for prepayment reviews: The bill would authorize the Secretary of Health and Human Services (HHS) to enter into contracts with recovery audit contractors specifically to perform prepayment reviews. This shifts or expands RAC activity from traditionally post-payment reviews to include prepayment scrutiny.
• Scope within Medicare program: The changes would apply to the Medicare program under title XVIII of the Social Security Act, aligning RAC activities with Medicare administrative operations.
• Contracting mechanism: The bill would establish or authorize the use of contractual relationships between HHS and RAC entities to carry out the prepayment review function, though the exact terms (pricing, performance standards, oversight) are not detailed in the summary text available here.

Note: The summary provided is based on the bill’s title and description. The full text would specify implementation details such as eligibility criteria for RACs, the review processes, case-selection methodology, safeguards, fraud and abuse provisions, privacy protections, oversight, reporting requirements, and any limitations or caps on prepayment reviews.

Who Would Be Affected

• Medicare program participants and beneficiaries: Potentially affected indirectly through changes in claims adjudication timing and payment accuracy. Prepayment reviews could reduce improper payments but may also impact claim processing timelines for providers.
• Healthcare providers and suppliers: Entities submitting Medicare claims could experience increased prepayment review activity, which may affect cash flow and administrative processes.
• Medicare contractors and RACs: RAC entities would take on a broader role, performing prepayment reviews under contract with HHS, and would be subject to federal contracting rules, performance standards, and compliance requirements.
• HHS and CMS governance: The Centers for Medicare & Medicaid Services (CMS) would implement and oversee expanded RAC activities, including contract management, monitoring, and evaluation of impact.

Procedural and Timeline Considerations

• Legislative path: As of the latest action, HR 8804 has been referred to the House Ways and Means Committee and the House Energy and Commerce Committee for consideration. Further actions (markups, passage in the House, Senate action, and potential signing) would determine final enactment.
• Effective date: The bill text would specify when the authority becomes effective, whether there are phased implementations, and any transition provisions. These details are not available in the summary.
• Reporting and oversight: The bill would typically require reporting on program performance, savings from improper payment reductions, and monitoring of any administrative burden on providers, though exact reporting requirements would be defined in the final text.

Potential Impact and Considerations

• Financial impact: By enabling prepayment reviews, the government may reduce improper payments prior to payment, potentially lowering Medicare expenditure tied to erroneous claims.
• Operational impact: Providers may experience changes in claims processing workflows, potential delays due to prepayment reviews, and the need for enhanced documentation to support claims.
• Policy considerations: The expansion of RAC activities to prepayment reviews raises questions about due process, timeliness, accuracy of determinations, and protections against submission delays for legitimate claims.

Summary

HR 8804 seeks to empower HHS to contract with recovery audit contractors to conduct prepayment reviews within Medicare, aiming to prevent improper payments before they are issued. The bill would involve contracting arrangements with RACs, expansion of RAC roles under title XVIII, and corresponding oversight by CMS. The legislative path includes committee referrals with potential for further actions to enact the measure into law.