The Medicare fee-for-service improper payment rate in 2018 is the lowest it has been since 2010. A sharp drop in home health improper payments, in particular, is a big part of the reason why.
Improper payments decreased by roughly $4.59 billion from 2017 to 2018, according to the U.S. Centers for Medicare & Medicaid Services (CMS), which highlighted the reduction late Friday afternoon. For the first time in improper payment reporting history, CMS recorded improper payment rate reductions in Medicare, Medicaid and the Children’s Health Insurance Program.
Specifically, the 2017 Medicare fee-for-service improper payment rate was 9.51%. The rate dropped to 8.12% in 2018.
CMS has taken several measures aimed at reducing improper Medicare payments to post-acute care providers in recent years. They include, for example, the 2016 Pre-Claim Review Demonstration and this year’s revised Review Choice Demonstration version.
The measures are necessary, CMS officials argue, because roughly 20% of U.S. tax dollars are spent on health care.
Home health corrective actions have resulted in a $6.92 billion decrease in estimated improper payments from 2015 to 2018, according to CMS. Additionally, the home health improper payment rate decreased from 58.95% in 2015 to 17.61% in 2018.
“Our accomplishments over the past year were the result of a focused effort to target root causes of improper payments,” CMS Administrator Seema Verma said in a statement. “CMS also implemented a targeted review strategy that focused on provider education, assistance and burden reduction.”
Home health improper payment reductions far outpaced other post-acute care sectors.
For comparison, skilled nursing facility corrective actions have 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% in 2017 to 6.55% in 2018.
Durable medical equipment, prosthetics, orthotics and supplies improper payments have decreased an estimated $1.14 billion from 2016 to 2018. The reduction represents a decrease in improper payment rates from 46.26% in 2016 to 35.54% in 2018.
“While we have made progress on reducing the improper payments rate, we are not satisfied and more work needs to be done to achieve increased and consistent reductions in the future by implementing already existing initiatives as well as innovative processes,” Verma said.
Improper payments are not necessarily measures of fraud, according to CMS. They may be payments that did not meet statutory, regulatory, administrative or other legally applicable requirements. Improper payments, which may be overpayments or underpayments, are generally expenses that should not have occurred.
2018 marks the second consecutive year the rate has been below the 10% threshold for compliance established in the Improper Payments Elimination and Recovery Act of 2010.
Written by Robert Holly