Medicare Compliance & Reimbursement

If you’ve been waiting patiently for Medicare’s annual improper payment rate data, you’re in luck. Federal estimates highlight rate declines, attributing the positive numbers to corrective actions in home health and skilled nursing facilities (SNF).

Now: On Nov. 16, the Centers for Medicare & Medicaid Services (CMS) announced the Fiscal Year (FY) 2020 estimated improper payment rates. As part of its Comprehensive Error Rate Testing (CERT) program, CMS publishes the CERT report, which breaks down the biggest errors among Medicare fee-for-service (FFS) claims and covers the causes of the improperly paid charges.

Reminder: In light of COVID-19, CMS issued an enforcement discretion and ceased collecting provider data from March to August 2020. “To compile the report, CMS adjusted calculation methods for reporting improper payment rates for the 2020 Agency Financial Report (AFR), using data already available at the time of the COVID-19 pandemic or data voluntarily provided. The calculated rates still meet national precision requirements,” explains Wachler & Associates in the firm’s Health Law Blog.

Overall, the government estimates a 6.27 percent improper payment rate from Part A and B claims during FY 2020, which represents a total of $25.74 billion in improper payments. This is a decrease from FY 2019’s estimated payment rate of 7.25 percent and $28.91 billion in improper payments. “The decrease was driven by reductions in the improper payment rates for home health and skilled nursing facility claims,” an agency fact sheet says.

CMS recorded a $5.90 billion decrease in estimated improper payments for home health from 2016 to 2020. In addition, “the improper payment rate for home health claims decreased from 12.15 percent in FY 2019 to 9.30 percent in FY 2020,” said a CMS spokesperson. 

SNF saw a $1 billion decrease from 2019 to 2020.

CMS points to its Targeted Probe and Educate program, facilitated by the Medicare Administrative Contractors (MACs), as a major factor in the home health and SNF successes. Policy reforms in both areas are also mentioned in the fact sheet.

CERT Report supplemental data was not available at press time.

Find the fact sheet at www.cms.gov/newsroom/fact-sheets/2020-estimated-improper-payment-rates-centers-medicare-medicaid-services-cms-programs.