HHS misses key opportunities for improper payment recovery

While it generally complied with federal improper payment reporting requirements, the Department of Health and Human Services (HHS) fell short in several key areas, according to an independent audit conducted by Ernst & Young LLP.

Specifically, HHS failed to hit its target improper payment rate of less than 10 percent for Medicare's fee-for-service program in fiscal year 2015. Medicare's error rate exceeded 12 percent thanks to a 7.5 percent spike in improper payments for home health claims, according to the audit by the Office of Inspector General.

The agency also failed meet improper payment reduction rates for Medicare Advantage, Medicaid and the Children's Health Insurance Program, and neglected to provide a "systematic method" to its operating divisions for identifying programs that should undergo an improper payment risk assessment.

Medicaid's improper payment rate increased from 6.7 percent in 2014 to 9.8 percent in 2015, prompting concerns that the program is unsustainable if improper payments continue to go undetected. Last year, the Government Accountability Office (GAO) reported Medicare and Medicaid accounted for nearly two-thirds of improper payments from the federal government.

The audit also indicated that HHS failed to conduct recovery audits for Medicare Advantage in 2015, adding credence to a GAO report released days earlier that called on the Centers for Medicare & Medicaid Services (CMS) to make "fundamental improvements" to its MA auditing process. In December, the Center for Public Integrity revealed CMS knew certain MA plans were inflating risk scores, but held back on auditing and recouping overpayments from insurers.

To learn more:
- here's the Ernst & Young audit

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