CMS: Medicare improper payment rate fell as new fraud prevention efforts take hold

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The Centers for Medicare & Medicaid Services estimated that the fee-for-service improper Medicare payment rate for fiscal 2019 was the lowest since 2010. (Getty Images/Olivier Le Moal)

The improper payment rate in traditional Medicare fell to the lowest level since 2010, a feat the Trump administration claims is due to aggressive fraud prevention measures.

The improper payment rate for federal fiscal year 2019 was 7.25%, a decrease from 8.12% in fiscal year 2018, according to a release from the Centers for Medicare & Medicaid Services (CMS) Monday. This is the third consecutive year that the improper payment rate for fee-for-service payments fell below 10%.

“Every dollar spent inappropriately is one that should have been used to benefit patients,” said CMS Administrator Seema Verma in a statement. “Under President Trump’s leadership, CMS is pulling every lever at its disposal to safeguard precious resources and direct them to those who truly need them.”

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Improper payments declined by more than $7 billion from fiscal year 2017 to 2019, "to a total $28.9 billion," the agency said. 

CMS pointed to clarifications and documentation changes to help improve billing accuracy last year.

For example, Medicare Part B services such as physician office visits, ambulance services and lab tests had a $1.82 billion reduction in estimated improper payments in the last year due to such initiatives.

Durable medical equipment and prosthetics also saw improper payments decrease by an estimated $1.29 billion from fiscal year 2016 to 2019 “due to various corrective actions implemented over the years,” CMS officials said.

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The release comes nearly a month after CMS unveiled what it calls a “five pillar program integrity strategy” to modernize the approach to improper payments. The overhaul includes reducing provider burden by using new technology like machine learning to improve compliance review.

“CMS has taken a multifaceted approach that includes provider enrollment and screening standards to keep bad actors out of the program, enforcement against bad actors, provider education on our rules and requirements, and advanced data analytics to stop improper payments before they happen,” Verma said Monday.

CMS also reported that the national improper payment rate estimate for Medicaid for fiscal year 2019 was nearly 15% or $57.4 billion and 15.8% or $2.7 billion for the Children’s Health Insurance Program.

The agency is concerned about eligibility errors made by states.

“Some of the most consistent findings included states maintaining insufficient documentation to substantiate that income and other information was appropriately verified,” CMS officials said.

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