CMS touts decreased improper payment rate

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Tuesday, November 17, 2020

WASHINGTON – CMS says its aggressive corrective actions have led to an estimated $15 billion reduction in Medicare fee-for-service improper payments since 2016. 

The Medicare fee-for-service estimated improper rate decreased to 6.27% in fiscal year 2020, compared to 7.25% in FY 2019, the fourth consecutive year the rate has been below the 10% threshold for compliance established in the Payment Integrity Information Act of 2019. 

“We must ensure that fraud and abuse doesn’t rob the program of precious resources,” said CMS Administrator Seem Verma. “From the beginning, this administration has doubled down on our commitment to protect taxpayer dollars and this year’s continued reduction in Medicare improper payments is a direct result of those actions.” 

CMS says the reduction is the result of efforts to identify root causes of improper payments, implement action plans to reduce and prevent improper payments, and extend the agency’s capacity to address emerging areas of risk through work groups and interagency collaborations. 

One example of activities that have helped to reduce the improper payment rate: home health improvements, including clarifying documentation requirements and educating providers through the Targeted Probe and Educate program, which resulted in a $5.9 billion decrease in estimated improper payments from FY 2016 to FY 2020. 

CMS has developed a five-pillar program integrity strategy to modernize its approach to reducing improper payments, it says: 

  • Stop bad actors: CMS works with law enforcement agencies to crack down on “bad actors” who have defrauded federal health programs. 
  • Prevent fraud: Rather than the expensive and inefficient “pay and chase” model, CMS prevents and eliminates fraud, waste and abuse on the front end by proactively strengthening vulnerabilities before they are a problem. 
  • Mitigate emerging programming risks: CMS is exploring ways to identify and reduce program integrity risks related to value-based payment programs by looking to experts in the health care community for lessons learned and best practices. 
  • Reduce provider burden: To assist rather than punish providers who make good faith claim errors, CMS is reducing the burden on providers by making coverage and payment rules more easily accessible to them, educating them on CMS programs and reducing documentation requirements that are duplicative or unnecessary. 
  • Leverage new technology: CMS is working to modernize its program integrity efforts by exploring innovative technologies like artificial intelligence and machine learning, which could allow the Medicare program to review compliance on more claims with less burden on providers and less cost to taxpayers.