Improper payment rates for DME have dropped $1.29B

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Tuesday, November 19, 2019

WASHINGTON – CMS announced Nov. 18 that program integrity measures lowered the estimated amount of Medicare fee-for-service improper payments by $7 billion from FY 2017-19 to $28.9 billion, the lowest level since FY 2010.

Specifically, the agency says DMEPOS improper payments decreased an estimated $1.29 billion from FY 2016-19 due to various corrective actions.

“Our progress on improper payments is historic, but there’s more work to be done,” said CMS Administrator Seema Verma. “CMS has taken a multi-faceted approach that includes provider enrollment and screening standards, enforcement against bad actors, education on rules and requirements, and advanced data analytics,” she said. “These initiatives strike an important balance between preventing improper payments and reducing the administrative burden on legitimate suppliers.”

The improper payment rate decreased to 7.25% in FY 2019, down from 8.12% in FY 2018, the third consecutive year it has been below the 10% threshold for compliance per the Improper Payments Elimination and Recovery Act of 2010.

In addition to DMEPOS, this year’s decrease was driven by progress in:

  • Home health claims saw a $5.23 billion reduction in improper payments from FY 2016-19 due to corrective actions, including policy clarification and Targeted Probe and Educate for home health agencies.
  • Other Medicare Part B services, i.e. physician office visits, ambulance services, lab tests, saw a $1.82 billion reduction in improper payments in the last year due to clarification and simplification of documentation requirements for billing Medicare under CMS’s Patients Over Paperwork Initiative.


CMS has developed a five-pillar program integrity strategy: Stop bad actors, prevent fraud, mitigate emerging programmatic risks, reduce provider burden and leverage new technology.