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Improper Medicare payments for Medicare fee-for-service payments decreased from 11 percent in 2016 to 9.5 percent in 2017, representing a $4.9 billion decrease, according to a November 15 blog post by Kimberly Brandt, principal deputy administrator for Operations at the Centers for Medicare and Medicaid Services.
This is the first time since 2013 that the Medicare FFS improper payment rate is below the 10 percent threshold for compliance established in the Improper Payments Elimination and Recovery Act of 2010, Brandt said.
The 2017 Medicare FFS estimated improper payment rate represents claims incorrectly paid between July 1, 2015 and June 30, 2016.
"Improper payments are not always indicative of fraud, nor do they necessarily represent expenses that should not have occurred," Brandt said.
Improper payments include instances in which there is insufficient or no documentation to support the payment.
The majority of Medicare FFS improper payments are due to documentation errors in which CMS could not determine whether the billed items or services were actually provided, were billed at the appropriate level, and/or were medically necessary.
A smaller proportion of Medicare FFS improper payments are payments for claims CMS determined should not have been made or should have been made in a different amount, representing a known losses to the program.
These represent about 3 percent of improper payments, an estimated known loss of $11.3 billion out of the total estimated improper payments of $36.2 billion.