Medicare Improper Payments Fall to Lowest Level in Eight Years

The Centers for Medicare & Medicaid Services (CMS) announced last week that its efforts to reduce improper payments is working. CMS noted that it paid out an estimated $31 billion in improper payments during fiscal year 2018, down from $36.2 billion a year earlier. That’s the lowest level since 2010.

CMS noted this is the first year in improper payment reporting history that the Medicare Fee-For-Service (FFS), Medicare Part C, Medicare Part D, Medicaid and Children’s Health Insurance Program achieved reductions in all five programs’ improper payment rates.

Improper payments include fraudulent claims, payments made to the wrong recipient, payments made for the wrong amount (over or under), and payments made without sufficient documentation.

The home health industry saw its improper payment rate drop to 17.61 percent from 58.95 percent from 2015 to 2018, that’s a whopping $6.92 billion in savings. Skilled nursing facility corrective actions resulted in a $1.04 billion decrease in estimated improper payments from 2017 to 2018. The skilled nursing facility improper payment rate decreased from 9.33 percent in 2017 to 6.55 percent in 2018.

Durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) saw improper payments fall from 46.26 percent in 2016 to 35.54 percent in 2018. Although this sector represents a small portion of improper payments, corrective actions resulted in a $1.14 decrease in estimated improper payments from 2016 to 2018.

CMS notes that the savings are a result of “multi-faceted efforts to target the root causes of improper payments with an emphasis on prevention-oriented activities.” CMS used a multifaceted strategy designed to target the root causes of improper payments including prevention-oriented activities such as provider outreach, policy clarifications and simplifications, prior authorization initiatives, as well as increased enforcement efforts.

As we wrote about last year CMS’ Fraud Prevent System (FPS), which analyzes fee-for-service claims to identify healthcare providers with suspect billing patterns, has helped to stop billions of dollars in improper payments.

Given its emphasis on reducing improper payments, healthcare providers would be well-advised to make sure they are filing claims properly. While billing and coding errors make up for a big part of the overpayments, healthcare fraud contributes to part of those losses.

The Health Law Offices of Anthony C. Vitale has extensive experience representing clients in audits and overpayments and we can represent your interests through all of the stages of the overpayment appeals process. In addition, if you find yourself the target of a fraud investigation, our team can assist you every step of the way. cContact us for additional information at 305-358-4500 or send us an email to and let’s discuss how we might be able to assist you.

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