CMS: Medicare improper payment rate dips below 10%

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The majority of Medicare improper payments are tied to documentation errors.

In 2017, the improper payment rate for fee-for-service Medicare dropped to 9.5%—the first time since 2013 that figure has been below 10%.

By comparison, the rate was 11% in 2016, and there was a $4.9 billion year-over-year decrease in estimated improper payments, according to a blog post by Kimberly Brandt, principal deputy administrator for operations at the Centers for Medicare & Medicaid Services.

The post noted that the majority of improper payments are tied to documentation errors and are thus not necessarily expenses that shouldn’t have occurred.

Others, though—such as medical necessity and incorrect coding errors—are categorized as a “known monetary loss.” The rate of that category of improper payments is 3%, or $11.3 billion out of the estimated improper payments total of $36.2 billion.

RELATED: OIG: Ohio, Kansas got millions in improper bonus payments from feds under CHIP law

As for why the overall improper payment rate is lower than it has been in years past, Brandt credited actions that the Trump administration has put in place, noting that CMS’ new leadership is “re-examining existing corrective actions and exploring new and innovative approaches” to reducing improper payments.

“CMS is pleased to have achieved this reduction in the improper payment rate, but we still have work to do,” she added.

Last year, CMS officials said the improper payment rate dropped from 12.1% in 2015 to 11% in 2016 chiefly because of the two-midnight rule, which set a new benchmark for impatient hospital claims.

But in both of those years, it failed to reach the target of less than 10% established in the Improper Payments Elimination and Recovery Act of 2010. An independent audit released in May 2016 from the firm Ernst & Young LLP said the rate exceeded 12% in 2015 mainly because of a spike in improper payments for home health claims.

In other news:

Auto insurers settle Medicare, Medicaid fraud allegations

Two Progressive auto insurance companies, one from Ohio and the other from New Jersey, have agreed to pay $2 million to resolve allegations that they fraudulently caused Medicare and Medicaid to make improper payments.

According to allegations raised in a whistleblower lawsuit, Progressive offered “health first” auto insurance policies that designated the company as a “secondary payer” of medical claims incurred in an auto accident. That led Medicare and Medicaid to be billed first when an accident occurred that led to medical treatment, meaning the programs ended up improperly paying claims that Progressive should have paid.

Acting U.S. Attorney William E. Fitzpatrick’s announcement of the settlement with the Progressive companies noted that the claims settled are “allegations only” and there has been no determination of liability.

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