Final answer:
Recovery Audit Contractors (RAC) are designed to detect improper payments in Medicare and Medicaid programs, ensuring compliance with policies and reducing fraud, waste, and abuse.
Step-by-step explanation:
The contracting authority designed to detect improper payment for both Medicare and Medicaid is the Recovery Audit Contractors (RAC). The RAC program is tasked with identifying and correcting improper payments in Medicare and Medicaid programs. Recovery Audit Contractors review claims on a post-payment basis, and detect overpayments and underpayments to healthcare providers. They ensure that the providers have complied with Medicare and Medicaid policies. The RAC program is an essential component of the efforts to reduce improper payments and prevent fraud, waste, and abuse in the healthcare system.