According to a recent article in the Seattle Times, the Medicare contractor audit program which was launched in three states on a trial basis in 2005 and is expected to expand to all 50 states by 2010 could end up costing the public dearly, with potentially very little to show for the efforts.  According to the article, the audit contractor has been denying millions of dollars worth of rehab hospital claims on medical necessity grounds.  The contractor stands to earn a commission of 25-30% on unnecessary or incorrect payments they are able to identify.  As of September 30, 2006, the company had earned commissions of up to $29M.  While many of the denied claims are reportedly being overturned on appeal, the auditor gets to keep their commissions if the denials are sustained through the first 2 (of 6) levels of appeal.  Sounds like a pretty sweet deal.