CMS achieves lowest Medicare improper payment rate since 2010

Medicare written on paper with a stethoscope
CMS says Medicare fee-for-service improper payment rates hit an all-time low in 2018. (Getty/Design491)

The improper payment rate in the Medicare fee-for-service program fell to 8.12% in 2018, its lowest rate since 2010, according to the Centers for Medicare & Medicaid Services (CMS). 

The result is due to a yearslong effort by CMS to get the rate below 10%, a goal the agency achieved in the last two years.

In particular, corrective action on home health treatment brought those improper payments down dramatically: from 58.96% in 2015 to 17.61% in 2018. 

FREE WEBINAR | DECEMBER 13, 2018

Employer-Based Insurance: Top Priorities for 2019

Join Blue Health Intelligence (BHI) and Midwest Business Group on Health (MBGH) to hear how key descriptive, predictive and prescriptive analytics capabilities can drive new cost and quality insights for health plans, employers and benefit consultants.

"Home health corrective actions resulted in a significant $6.92 billion decrease in estimated improper payments from 2015 to 2018," CMS wrote in a release.

Fiscal Year 2015-2018 Medicare FFS Overall and Home Health Improper Payment Rates (CMS)

The agency also said that it had improved improper payment rates in Medicaid, CHIP and other parts of Medicare. But it did not specify by how much. A spokesperson did not immediately respond to a request for additional data.

"CMS has implemented several initiatives to address improper payments, resulting in this being the first year in improper payment reporting history that the Medicare Fee-For-Service (FFS), Medicare Part C, Medicare Part D, Medicaid and Children’s Health Insurance Program achieved reductions in all five programs’ improper payment rates," the agency wrote.

Medicaid, in particular, has faced its share of problems with improper payments in recent years. Improper payments actually surged to $37 billion in 2017, up from $29.1 billion in 2015.

RELATED: Medicaid wasted $37B on improper payments in 2017, CMS shrugs off GAO advice

So, if CMS has indeed managed to curb improper payments in that program, it would mark quite an accomplishment.

Meanwhile, Medicare's efforts to address improper payments ramped up back in 2010 when Congress passed the Improper Payments Elimination and Recovery Act of 2010. Since then, the agency has used a number of strategies to prevent improper payments:

  • Prior authorization initiatives to ensure a patient has the applicable coverage before providing services
  • Targeted probing and education offers for outlier providers
  • Policy clarifications and simplifications
  • Limits on the number of medical records requested
  • Increased provider education on Medicare policy