Medicare Compliance & Reimbursement

Medicare continues to pay providers more accurately, according to a new report.

The improper payment rate for Medicare fee-for-service providers dropped from 3.9 percent last year to 3.6 percent in 2008, the Centers for Medicare & Medicaid Services says in the latest comprehensive error rate testing (CERT) report. That translates to $10.4 billion in incorrect payments to FFS providers for the year, CMS says in a release.

"For Medicare FFS, most improper payments are due to claims for services that were medically unnecessary or incorrectly coded," CMS says.

For the first time, CMS calculated error rates for the Medicare Advantage, Medicaid, and SCHIP programs. MA payments reached a 10.6 percent error rate in 2007, Medicaid payments were 10.5 percent, and SCHIP payments 14.7 percent.

Those higher rates were largely due to lack of documentation, the same problem CMS had in calculating FFS rates before major education efforts, the agency points out in a release.

Safeguard: This year's CERT report comes after the HHS Office of Inspector General blasted CMS and its CERT contractor for low-balling durable medical equipment payment error rates in 2006.

Instead of the reported error rate of 7.5 percent, the rate should have been more like 30 percent, the OIG claimed. The inaccurate report set off a firestorm of political and public scrutiny that embarrassed both the industry and CMS.

CMS response: "To strengthen confidence in the accuracy of reported error rates, CMS also.announced it is conducting an in-depth evaluation effort to review this year's Medicare FFS error rate," the agency says in its release.

At press time, CMS hadn't yet posted the full report and provider-specific error rates. The 2008 report will be at www.cms.hhs.gov/CERT.