Medicare improper payments drop to lowest rate since 2010
Medicare fee-for-service improper payments dropped to their lowest level since 2010 this year, CMS Administrator Seema Verma announced on Nov. 16.
Improper payments are not necessarily fraud, but can be payments that did not meet other requirements, overpayments, underpayments and those that "do not necessarily represent expenses that should not have occurred."
From 2017 to 2018, estimated improper payments decreased $4.59 billion. Lower improper payment was reported across Medicare, Medicaid and the Children’s Health Insurance Program (CHIP) in 2018––a first in improper payment reporting history, according to CMS. By comparison, Medicaid reported higher improper payments in 2017 than 2015, at $37 billion.
In 2018, the improper payment rate was 8.12 percent, compared to 9.51 percent in 2017. Both years fell below the 10 percent threshold outlined in the Improper Payments Elimination and Recovery Act of 2010.
While the rate has dropped, CMS is still committed to more corrective actions in the future.
“While we have made progress on reducing the improper payments rate, we are not satisfied and more work needs to be done to achieve increased and consistent reductions in the future by implementing already existing initiatives as well as innovative processes,” Verma said in a statement.
One of the biggest healthcare sectors where improper payments declined was home health. From 2015 to 2018, the improper payment rate dropped from 58.95 percent to 17.61 percent, a $6.92 billion difference. CMS has implemented and proposed numerous changes to the home healthcare sector over the last several years, and has recently introduced a new payment model for 2020.
Corrective actions in skilled nursing resulted in about a $1 billion decrease in estimated improper payments from 2017 to 2018, with the rate dropping from 9.33 percent to 6.55 percent, according to CMS. Similarly, improper payment rates in durable medical equipment, prosthetics, orthotics and supplies fell from 46.26 percent in 2016 to 35.54 percent in 2018.
The agency will continue with its program integrity initiative, using a “multifaceted approach” including provider enrollment and screening standards, enforcement authorities and advanced data analytics, such as predictive modeling. CMS is also engaging in provider outreach and education as well as a target probe and educational approach to auditing.
The agency is looking at potentially implementing other initiatives, taking its cue from the private sector. These include prior authorization and documentation requirement lookup services.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."