New federal data estimates that the Centers for Medicare and Medicaid Services (CMS) paid $31 billion in improper payments in FY 2018, which equals about 8.12 percent of all claims paid in that period. That is the lowest improper payment rate for Medicare fee-for-service since 2010.
- When calculating improper payments, the agency included the following: fraudulent claims, payments distributed to the wrong recipient or for an inaccurate amount, payments without the proper documentation, and instances in which the recipient used the funds improperly
- This new rate decreased from the $36.2 billion CMS paid in FY 2017, which equaled 9.51 percent of Medicare claims
- The improper payment rate in the home health sector also dropped drastically, down from 58.9 percent in 2015 to 17.6 percent in 2018
Representatives of CMS suggested the agency’s efforts to create a more targeted claims auditing process contributed to the reduction in improper payments. CMS indicated it may increase its use of prior authorization for some services and continue educating providers regarding documentation and prior authorization requirements to keep reducing improper payments.
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