Faulty Medicare payments hold steady

Friday, February 28, 2003

WASHINGTON - Improper Medicare benefit payments made during 2002 totaled $13.3 billion, about 6.3%, of the $212.7 billion in processed fee-for-service payments reported by CMS, according to a new report by the OIG.

As a rate of error, the current 6.3% estimate is the same as last year’s rate, which was the lowest to date and less than half the 13.8% reported for FY 1996.

“As a taxpayer I’m glad the rates are going down,” said Bently Goodwin, president of RemitData, a company that helps providers correct billing that could lead to denials.”But from an industry point of view, I’d say nobody is probably looking at the inverse of that: how many claims are not getting paid that should be.”

Not so, said an OIG spokesperson: “We’ve found statistically that it is a very, very, very small number.”

In 2002, as in past years, improper payments could range from reimbursement for services provided but inadequately documented to inadvertent mistakes to outright fraud and abuse. The 2002 estimate of improper payments is significantly less than the $23.2 billion that the OIG estimated for 1996, the first year it compiled the statistics.

The improper payments broke down like this:

- Medically unnecessary ser- vices: 57.1%

- Documentation deficiencies: 28.6%

- Miscoding: 14.3%