Medicare Payment Integrity Enhancement Act of 2026

This bill expands the role of **Recovery Audit Contractors (RACs)** within the Medicare program. It authorizes the Secretary of Health and Human Services to engage these contractors to perform **prepayment reviews** of claims, aiming to prevent improper payments before they are disbursed, rather than solely recouping them post-payment. A key provision establishes a new payment structure for RACs conducting prepayment reviews. Their compensation will be determined by a methodology established by the Secretary, which must consider the **amount of improper payments prevented** and incentivize timely, accurate prevention without disproportionate focus on specific claim types. This approach seeks to enhance Medicare payment integrity by shifting audit efforts to a proactive stage. The legislation mandates that the Secretary issue implementing regulations within one year of enactment, detailing the payment methodology for RACs and how the **savings generated** by these reviews will be calculated. Funding for these prepayment review activities will be transferred from the Federal Hospital Insurance and Supplementary Medical Insurance Trust Funds.