Medicare Compliance & Reimbursement

Documentation and medical necessity challenges top list of CERT woes.

The feds made some strides as the overall improper payment rate declined for Medicare Fee-for-Service (FFS) claims. But, the CERT news isn’t all great since Part B providers’ error rates went up — big time.

Context: On Dec. 7, 2023, the Centers for Medicare & Medicaid Services (CMS) published its “2023 Medicare Fee-for-Service Supplemental Improper Payment Data” report as part of its Comprehensive Error Rate Testing (CERT) program. CMS uses CERT data to estimate the scope and scale of improper payments and measure the claims error rate. The information the agency collects is then used by Medicare Administrative Contractors (MACs) and others to improve the claims issues.

Refresher: Under the CERT program, CMS pulls random claims samples and checks to see if they were paid in accordance with Medicare coverage, coding, and billing requirements. Moreover, CERT auditors review whether the claim “was paid when it should have been denied or paid at another amount (including both overpayments and underpayments),” a CMS fact sheet reminds. Additionally, the independent reviewers scrutinize claims with insufficient documentation, determining whether the data shows if the claims were properly or improperly paid, CMS adds.

Check Out the Latest Statistics

For FY 2023, the CERT report lists the improper payment rate at 7.38 percent for the 12-month period from July 1, 2021 through June 30, 2022. That error rate translates to $31.23 billion in improper payments. This is the seventh straight year that the overall rate has been

under 10 percent; plus, the numbers declined slightly from 2022 to 2023, which is a positive. Last year, the improper payment rate was at 7.46 percent, and improper payments clocked in around $31.46 billion.

Breakdown: Over the past few years, CMS has been quite vocal about its efforts to reverse Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) providers’ problematic improper payment rates. With educational programs and interventional tools in place, the agency continues to make significant progress. For a second year in a row, the DMEPOS’ improper payment rate decreased from 25.2 percent in 2022 to 22.5 percent in 2023, Table B1 of the CERT report notes. DMEPOS improper payments are projected at $1.9 billion.

Medicare Part A (excluding IPPS) also saw a decline to the FY 2023 FFS improper payment rate. After a big error rate jump from 2021 to 2022 — 6.31 percent to 8.9 percent — Medicare Part A (excluding IPPS) dropped to 7.8 percent with $14.2 billion in improper payments projected for 2023, a decrease from $17.1 billion in 2022.

On the converse, the error rates for both Medicare Part B and Medicare Part A (Hospital IPPS) climbed. Here’s how these parts of Medicare impacted the FY 2023 FFS improper payment rate, according to Table A1 of the CERT Report:

• Medicare Part A (Hospital IPPS) went from 3.0 percent in 2022 to from 3.4 in 2023. Improper payments increased from $3.4 billion to $4.1 billion.
• Medicare Part B’s improper payment rate took a substantial turn upwards, jumping from 8.2 percent in 2022 to 10.0 percent in 2023. The projected amount for improper payments increased massively from 2022 to 2023, going from $8.8 billion to $11.0 billion.

E/M Visits for Established Patients Continue to Plague Part B Providers

The CERT report highlights Medicare providers’ and suppliers’ longstanding problem of lackluster documentation, which remains the chief culprit leading to improper payments. For FY 2023, insufficient documentation accounted for 62.8 percent of improper payments, down from 63.6 percent in 2022. On the other hand, medical necessity woes picked up, increasing from 13.8 percent last year to 15 percent for 2023. Incorrect coding was third at 11. 6 percent, more than a percentage higher than the 2022 error rate of 10.5 percent, Figure 2 indicates.

Medicare Part B providers particularly struggled with evaluation and management (E/M) visits for established patients. Upcoding of these services is listed as the top root cause for Part B with downcoding the second leading cause. Insufficient documentation — inadequate date of service (DOS), missing signatures or attestation, and missing DOS — rounds out the other three spots, according to Table 5 of the CERT report. Additionally, incorrect coding of established E/M service codes carried a whopping 70.7 percent error rate, and they accounted for 3.5 percent of the overall improper payment rate, Table D1 notes.

Find Out If Your State Is an Outlier

Among the many valuable insights garnered from the CERT report is the opportunity to check how your state is doing. Population is obviously a factor with the amount of improper payments a state racks up and is attributed to the overall numbers. For example, Florida (10.8 percent), California (10.7 percent), and Texas 9.4 percent) had the highest amount of improper payments across all parts of Medicare and had the highest overall impacts on the total.

But, other states had significantly higher error rates among their Medicare claims despite smaller populations, Table B8 shows. West Virginia had the highest error rate of 23.6 percent. New Mexico was second at 18 percent while Alabama was third at 13.9 percent.

Resource: Review the FY 2023 CERT report at www.cms.gov/files/document/2023medicarefee-servicesupplementalimproperp aymentdatapdf.pdf.