News: Medicare FFS improper payment rate at its lowest since 2010

CDI Strategies - Volume 12, Issue 55

CMS announced that it achieved improper payment rate reductions in 2018 in Medicare Fee-For-Service (FFS), Medicare Part C, Medicare Part D, Medicaid, and Children’s Health Insurance Program. Notably, the fiscal year (FY) Medicare FFS improper payment rate is at 8%, which is the lowest it has been since 2010, Revenue Cycle Advisor reported.

The 2018 Medicare FFS improper payment rate represents claims processed between July 1, 2016, and June 30, 2017. According to CMS, the FFS improper payment rate decreased from 9.5% in 2017 to 8% in 2018, resulting in a $4.6 billion decrease in overpayments in part due to initiatives aimed at reducing improper payments in home health and skilled nursing facility claims.

According to CMS, actions taken in 2018 to prevent and reduce improper payments included:

  • A targeted probe and educate medical review strategy to identify outlier providers
  • Policy clarifications and simplifications
  • Prior authorization initiatives to ensure compliance with coverage, payment, and coding rules

The home health improper payment rate has decreased from 59% in 2015 to 18% in 2018, which has resulted in an estimated $7 billion decrease in improper payments. The skilled nursing facility improper payment rate decreased from 9% in 2017 to 6% in 2018, resulting in a $1 billion decrease in estimated improper payments. 

Editor’s note: This article originally appeared in Revenue Cycle Advisor. For more information on the FY 2018 improper payment rates, including graphs of estimated Medicare FFS improper payments made from FY 2016-2018, see CMS’ fact sheet. 

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