The OIG has issued a report entitled “Recovery Audit Contractors’ Fraud Referrals.” By way of background, CMS contracts with recovery audit contractors (RACs) to identify improper payments of Medicare Part A and Part B claims, and they receive contingency fees based on the amount of improper payments identified. While RACs are not responsible for reviewing claims for fraudulent activity, they are responsible for referring any cases of potential fraud they identify to CMS. In its review, the OIG found that RACs referred only two cases of potential fraud to CMS during the period of March 2005 through March 2008, while CMS reported receiving no potential fraud referrals from RACs during this period. The OIG notes that RACs do not receive contingency fees for such fraud cases, which may serve as a disincentive for RACs to refer cases of potential fraud to CMS. The OIG recommended that CMS: (1) determine the outcomes of the two referrals made during the demonstration project, (2) implement a system to track fraud referrals, and (3) require RACs to receive mandatory training on the identification and referral of fraud. CMS concurred with the recommendations.