News: CMS reports decrease in improper payments

Improper payments for Medicare fee-for-service (FFS) decreased from 3.9% to 3.6% in fiscal year (FY) 2007, CMS announced in a November 17 press release. The change represents approximately $400 million.

 

For the first time CMS also reported Medicare Advantage improper payment rates for calendar year 2006 and national composite error rates for Medicaid and for the State Children’s Health Insurance Program (SCHIP) for 2007. CMS made $6.8 billion (or 10.6%) in improper payments for Medicare Advantage during calendar year 2006. The Medicaid composite error rate is 10.5% ($32.7 billion, the federal share being $18.6 billion). The SCHIP composite error rate is 14.7% ($1.2 billion, the federal share being $0.8 billion).

 

The improper payments do not necessarily reflect fraud, according to the press release. Incorrect coding or medically unnecessary procedures account for many of the improper payments. Inadequate documentation is a common problem leading to Medicaid and SCHIP improper payments.

 

CMS’ has gone to great efforts to reduce payment errors; the Medicare FFS error rate has declined more than 10% since 1996, according to the press release.

 

"We are using the most effective information-gathering tools available to help us identify and eliminate improper payments in our efforts to protect the integrity of CMS programs," Kerry Weems, CMS acting administrator said in the press release.

 

To read the press release, click here.