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Improper payment rate reductions in Medicare Fee-For-Service

If you read the website on the topic of ‘The Improper Payments and Elimination and Recovery Act of 2010’ it clearly defines an ‘improper payment’ as any reimbursement/payment which was incorrect or was nor made due to incorrect charge entry, contractual, administrative, or any other federal requirements.

Calculating the Improper Payment Rate

From a stratifying random sampling of claims, the CMS calculates a national improper payment rate along with contractor specific and service-specific improper rates. According to experts. The improper payment rate that is calculated from the stratified sampling is considered to show all claims processed by the Medicare program during the claims filing period. 

However, the CMS clearly notes that the improper payment rate is not a ‘fraud rate,’ but is a calculation of payments that did not match the meet Medicare requirements. And on the outset, no agency can label a claim as fraudulent.

In Numbers

Each year the HHS or Department of Health and Human Services comes up with a paper on improper payment rate in the Agency Financial Report. Following this, the CMS publishes a more detailed improper payment rate data in the form of the annual Medicare FFS Improper Payments Report and Appendices.  

CMS published the Medicare Fee-for-Service Supplemental Improper Payment Data Report 2018 on November 30. This annual report publishes a review of claims submitted from July 1, 2016, till June 30, 2017.  

Overall Percentage

  • Overall Percent Accuracy Rate – 90% – Improper Payment Rate $357.5B
  • Percent Improper Payment Rate – 8% – Improper Payment Rate $31.4B

Reduction in Rates 

While all might not seem well with Medicare Fee-For-Service, however the 2018 Medicare improper payment rate for reimbursement fell to 8.10 percent, down from 9.50 percent the year before that reported a CMS fact sheet.

If you check the 2018 Medicare improper payment report rate it is the lowest rate since 2010. In fact, it is the second consecutive year that the rate is below the 10 percent threshold under the new rules of the Improper Payments Elimination and Recovery Act of 2010.

The reduction in Medicare improper payments Fee-For-Service represents a whopping savings of $4.50 million during FY 2017 to FY 2018. In terms of numbers the Medicare fee-for-service improper payment savings rose from home health corrective actions. If correlating the numbers of the last three years, home health Medicare improper payment rate fell from nearly 55 percent in 2015 to 16.65 percent in 2018.

CMS lowered the Medicare improper payments fee-for-service to health agencies about $6.90 billion during the 2015 to 2018 period, the fact further added.

The federal healthcare agencies also witnessed a reduction in Medicare improper payments in the skilled nursing facility services.

Partnering with Best

To control the improper payment rate reductions in Medicare Fee-For-Service the best possible way to avoid being at loss is to partner with a certified medical billing and coding company. By outsourcing, you are not just freed from the charging department, but can also utilise the time in serving your patients in a better manner.  

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