CMS: Estimated improper Medicare payments down $15B since 2016

Medicare spending costs money
CMS estimates it has decreased improper Medicare fee-for-service payments by $15 billion over a four-year period. (Getty/zimmytws)

The number of improper payments made under Medicare fee-for-service declined by $15 billion since 2016, according to new figures from the Trump administration.

The Centers for Medicare & Medicaid Services said that the data released late Monday is the result of a coordinated effort to identify the root cause of Medicare improper payments, which can include over or underpayments to providers in addition to fraud. The agency also updated data on Medicaid and the Children’s Health Insurance Program.

“From the beginning, this administration has doubled down on our commitment to protect taxpayer dollars and this year’s continued reduction in Medicare improper payments is a direct result of those actions,” CMS Administrator Seema Verma said in a release.

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CMS said the improper payment rate in Medicare fee-for-service declined to 6.27% in the 2020 federal fiscal year that ended in September. The rate is down from 7.25% in fiscal 2019 and 2020 is the fourth consecutive year that the rate is below 10%.

The decline in 2020 was primarily due to improvements in two areas. The first is home health, where CMS clarified documentation requirements and educated providers, resulting in a $5.9 billion decline in estimated improper payments from fiscal 2016 through 2020.

RELATED: CMS gets new powers to go after Medicare, Medicaid fraudsters

Another area that saw reductions was skilled nursing facilities, which saw a $1 billion decline in estimated improper payments in the last year.

The agency also released results of a probe into improper payments in Medicaid and the Children’s Health Insurance Program.

The Obama administration paused the State Payment Error Rate Measurements program that identifies improper payments in Medicaid and CHIP from fiscal 2015 through 2018 to give states more time to implement new requirements under the Affordable Care Act. CMS restarted the reviews in fiscal 2019. 

The 2020 Medicaid and CHIP improper payment rates are 21% ($86 billion) for Medicaid and 27% ($4.8 billion) for CHIP.

“Based on the measurement of the first two cycles of states, eligibility errors are mostly due to insufficient documentation to affirmatively verify eligibility according to requirements,” said CMS in a release.

One of the major areas that contributed to errors was that states didn’t have a record of the required eligibility data such as income.

“CMS is taking steps to ensure that states are working with their eligibility systems vendors to guarantee that every person on the program meets eligibility requirements and states maintain appropriate documentation of their verification process,” the agency said.

The agency’s reports come after CMS suspended all improper payment-related communication or data requests to providers and state agencies between March and August due to the COVID-19 pandemic.

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