Medicare Part C Improper Payment Measurement (IPM)

Medicare Part C IPM 

The Centers for Medicare & Medicaid Services (CMS) annually identifies, measures, and reports erroneous Medicare Part C payments. Since Fiscal Year (FY) 2008, CMS has submitted an annual Part C improper payment estimate and the estimation methodology to Congress in the Agency Financial Report (AFR). This page highlights important details about the payment error rate and provides useful links and resources to learn more.  

Part C Payment Error Rates from FY 2024 – FY 2016

For FY 2024, CMS reported an Improper Payment Measure (IPM) for the Part C program based on Payment Year 2022 (PY 2022). Note that CMS ended the policy of including new additionals in the underpayment calculation in CY20 (FY 2022). This makes FY 2022 and forward comparable, but not to prior years. Details on the policy changes can be found in the United States (U.S.) Department of Health and Human Services (HHS) Agency Financial Report (AFR). Table 1 presents results from the Part C IPM Error Estimates for FY 2024 – FY 2016.  

Table 1:  Part C Payment Error Estimates for FY 2024 – FY 2016

^{1 The reporting year reports on payment year data from two years prior (e.g., FY 2024 error estimate is based on PY 2022 payments).}

^{2 Gross payment error is calculated by taking the sum of the absolute values of the underpayments and overpayments (including overpayments due to missing or insufficient documentation).}

^{3 Net payment error is the difference between total overpayments (including overpayments due to missing or insufficient documentation) and the absolute value of the total underpayments.}

^{4 ESRD enrollees are included in the FY 2024 error rate methodology. Hospice enrollees are no longer excluded from the FY 2024 error rate methodology.  CMS will continue to observe how the rate fluctuates over the next couple of years when setting CY+1 targets.}

The authority for CMS activities in Medicare Part C is outlined in the Payment Integrity Information Act of 2019 (PIIA) Public Law (116-117), signed March 2, 2020. PIIA revoked the Improper Payments Information Act (IPIA) of 2002 and its subsequent amendments. It also revoked the Fraud Reduction and Data Analytics Act (FRDAA) of 2015. PIIA incorporates relevant provisions from these acts into a single subchapter in the United States Code.