WASHINGTON – The government has changed the way it calculates Medicare fraud, waste and abuse and is finding more improper payments than in years past, according to officials.

The Centers for Medicare and Medicaid Serivces announced Tuesday that "heightened scrutiny" and "more complete accounting" of Medicare fee-for-service (FFS) claims has resulted in a 2009 FFS error rate of 7.8 percent, or $24.1 billion, compared to 3.6 percent in 2008.

Officials from the Department of Health and Human Services said they will use "new tougher standards" for calculating improper Medicare payment rates for 2009 as part of an administration-wide effort to eliminate errors and prevent waste and fraud.

For 2009, CMS improved how it reviews Medicare claims for inpatient hospital services and eliminated the use of past billing records as part of a complex medical review, officials said. The agency also bumped up standards for claims review based on recommendations from the HHS Office of the Inspector General, members of Congress and CMS clinical experts.

CMS officials said they will "take further steps to ensure" that:

• providers are submitting all required clinical and medical documents to support a claim;
• providers' signatures on medical documents are legible;
• a provider's claims history can no longer be used to fill in missing treatment documentation; and
• medical information from a healthcare provider be included to support durable medical equipment claims, in addition to records from suppliers.

These efforts are designed to provide the CMS with more complete information about errors so it can better target improper payments, HHS officisls said.

HHS Secretary Kathleen Sebelius said improper payment rates are not necessarily an indicator of fraud, but they do provide a more complete assessment of how many errors need to be fixed.

"If we aren't honest about the problem, there is no way we can get to a solution," she said.

CMS Administrator Charlene Frizzera said the agency will invest more time and resources into educating providers on how to eliminate errors in Medicare claims.

"It's important that we continue to work closely with doctors, hospitals and other healthcare providers to make sure they understand and follow the more comprehensive fee-for-service requirements," she said.