CMS drives down improper payments

Sunday, November 23, 2008

WASHINGTON - CMS decreased improper payments for Medicare fee-for-service (FFS) from 3.9% in 2007 to 3.6% or $10.4 billion in 2008, protecting about $400 million in taxpayer dollars, according to a financial report released last week by the Department of Health and Human Services.

Improper payments for Medicare FFS are down from 14% in 2006.

For the first time, CMS also reported improper payments for Medicare Advantage (10.6% or $6.8 billion in 2006), Medicaid (10.5% or $32.7 billion) and SCHIP (14.7% or $1.2 billion).

Improper payments do not necessarily reflect fraud. For Medicare FFS, most improper payments were due to claims for services that were medically unnecessary or incorrectly coded. For Medicare Advantage, most were due to errors in documenting diagnoses.

For Medicaid and SCHIP, most were due to inadequate documentation. Other errors were due to services provided to beneficiaries who were not eligible for either program or who were not eligible for the services received.

To improve accuracy, CMS will conduct an in-depth evaluation of this year's Medicare FFS error rate. Additionally, it plans to develop methodologies to report the Medicare Part D error rate in the future.