The Centers for Medicare & Medicaid Services (CMS) Administrator Mark B. McClellan, M.D., Ph.D., announced today that aggressive oversight and improvement efforts have resulted in a further reduction of the number of improper Medicare claims payments from 5.2 percent in 2005 to 4.4 percent in 2006; a $1.3 billion reduction in improper payments.
“We have been increasing our efforts to reduce improper Medicare claims payments, and for the second year in a row, it’s paying off,” said CMS Administrator Mark B. McClellan, M.D., Ph.D. “Because we are able to measure the accuracy of payments more closely now, we are able to target our efforts more effectively with Medicare contractors and providers.”
The Medicare fee-for-service (FFS) error rate has declined from 14.2 percent in 1996, when the Medicare improper payment rate was first reported, to the current 4.4 percent in 2006. The recent error rate reductions have led to approximately $11 billion less in improper payments over the past two years. CMS pays more than 1 billion fee-for-service claims each year.
CMS conducted detailed reviews of randomly sampled Medicare FFS claims submitted between April 1, 2005 and March 31, 2006. Approximately 160,000 claims spanning all types of Medicare FFS payments were included in the Medicare error rate testing program. By providing accurate statistical information to its personnel and contractors, CMS can identify where problems exist and target improvement efforts to address the problems.
This effort reflects the agency’s increased commitment to use more detailed data and analysis to identify and eliminate improper payments. CMS has worked with the contractors to apply the data collected to improve system edits, update coverage policies, and direct provider education efforts. In addition, CMS has developed national and state-specific models for predicting inpatient-hospital payment errors to study the areas prone to payment error.
CMS reports its Medicare FFS improper payment findings in an annual report released every November. The complete report will contains additional error rate information along with more specific improper payment estimates. Once completed, the report will be released to the public via the CMS website at: cms.hhs.gov/cert.