Medicaid RAC Improvement Act of 2026

Key Points

• The bill strengthens the Medicaid Recovery Audit Contractor (RAC) program, which is meant to catch and recover Medicaid overpayments made to providers and health plans.
• For the first time, Medicaid managed care organizations and prepaid health plans, the private insurers many states pay to run Medicaid, would have to be included in these overpayment audits.
• States that currently have permission to skip parts of the RAC audit program would lose that option, since exception approvals cannot be extended past 2029.
• The Secretary of Health and Human Services must report to Congress every year starting in late 2027 on how well the Medicaid RAC program is recovering overpayments state by state.
• Auditors would get a standard 4-year look-back window to find and recover improper Medicaid payments, applying to both regular claims and managed care claims.