Traditional Medicare paid out an estimated $31.2 billion in improper payments in fiscal year 2023, according to new data from the federal government.
The Centers for Medicare & Medicaid Services (CMS) released its annual look at improper payments and found that the overall rate in Medicare was 7.38%, which sits below the 10% level mandated in statute. CMS said it's the seventh straight year that the program has achieved this benchmark.
The estimated improper payment rate in fiscal 2022 was 7.46%, so the difference was not statistically significant, CMS said.
The agency noted that "improper payments" are not exclusively fraud and represent potential overpayments, underpayments or payouts that were made despite a lack of information proving they were appropriate. CMS said most improper payments occur when an administrative step is missed by a state, contractor or provider.
The improper payment rate in Medicaid, meanwhile, was an estimated 8.53%, or $50.3 billion, CMS said. Of that, 82% of payments were in scenarios where there was "insufficent documentation," CMS said.
This is notable decrease from 2022's 15.62% rate, according to the fact sheet.
The Children's Health Insurance Program (CHIP) also saw improvement in improper payments, according to CMS. The analysis based the 2023 rate on reports from 2021, 2022 and 2023 and estimates 12.81% or $2.1 billion. That's down from a 26.75% improper payment rate last year.
Sixty-eight percent of payments were due to lacking documentation, which does not indicate widespread fraud, CMS said.
Estimates in Medicaid and CHIP reflect both additional flexibilites granted under the COVID-19 pandemic and improved state compliance, according to the fact sheet. It does not, however, capture any impacts related to the ongoing redeterminations and pandemic unwinding.
"While it is unclear how much the decrease is attributable to the PHE flexibilities versus improved state compliance, it appears that the PHE flexibilities had an impact on lowering the rate," CMS said in the fact sheet.