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CMS TAKES STEPS TO REDUCE IMPROPER PAYMENTS AND SAVE MONEY FOR MEDICARE

CMS TAKES STEPS TO REDUCE IMPROPER PAYMENTS AND SAVE MONEY FOR MEDICARE

The Centers for Medicare & Medicaid Services (CMS) today announced that it is moving forward with a new initiative to reduce errors, and save money for Medicare. New audits of Medicare Advantage contracts will reduce the payment error rate for the Medicare Advantage program and will recover an estimated $370 million in overpayments for the first audit year.  This estimate is a projection, and actual recovery amounts may vary depending on audit findings.

“Fighting fraud, improving payment accuracy, and saving money for Medicare is one of our top priorities,” said CMS Acting Administrator Marilyn Tavenner.  “CMS will use a new method of auditing Medicare Advantage plans that improves program integrity and reflects public input.” CMS received more than 500 comments on its draft methodology.

CMS is required to adjust payments to MA organizations based on the health status of their plan enrollees.  To receive risk-adjusted payments, MA organizations submit data to CMS. The Improper Payments Elimination and Recovery Act (IPERA) of 2010 requires CMS to annually audit these data.  From FY 2010 to FY 2011, CMS successfully reduced the payment error rate for the MA program by three percentage points (from 14.1 to 11 percent).

The new initiative launched today will further improve these audits.  The final audit methodology announced today for the Risk Adjustment Data Validation (RADV) program aims to further reduce the MA error rate.

This notice of final payment error calculation methodology is posted on the CMS website at: http://www.cms.gov/Plan-Payment/02_PaymentValidation.asp

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