- The amount Medicare's fee-for-service program spent on improper payments fell in fiscal year 2019 to its lowest rate in nearly 10 years, and came in below 10% for the third consecutive year, CMS announced Tuesday.
- The agency said the rate for FFS was 7.25% in fiscal year 2019, or $28.9 billion. That's down from $31.62 billion, or a rate of 8.12%, in fiscal year 2018. For the Medicare Advantage Program, the improper payment rate was 7.87%, or $16.73 billion, in 2019 — a decline from 8.10% or $15.55 billion in 2018.
- Improper payments rates for other programs, however, were up year-over-year. CMS said the rate was 14.9%, or $57.36 billion, for Medicaid and 15.8%, or $2.74 billion, for the Children's Health Insurance Program.
Fighting improper payments — which include not only instances of fraud and abuse but also inadvertent errors in claims — is a perennial problem for the government's healthcare programs. And CMS has announced new rules recently to combat the problem.
For example, the agency released a proposed rule called Medicaid Fiscal Accountability, which will add more scrutiny to supplemental payments that Medicaid pays to providers for a variety of reasons such as to support quality initiatives or the financial viability of rural or safety net providers.
The supplemental payments — which are in addition to reimbursement to providers for services rendered to beneficiaries — have increased from 9.4% of Medicaid payments in 2010 to 17.5% in 2017, according to CMS.
Another area of Medicaid under scrutiny is how states determine eligibility for the program. During a speech to the National Association of Medicaid Directors earlier this month, CMS Administrator Seema Verma said the agency plans to propose new rules overhauling eligibility standards for Medicaid.
During a review of the eligibility practices of 17 states, CMS found "high levels" of errors, and the rules will be designed to address those issues. The agency found examples where states did not have adequate documentation of beneficiaries' income or did not reconfirm beneficiaries' eligibility annually. There also were instances in which states assigned beneficiaries to incorrect eligibility categories, which led to higher federal matching rates than was appropriate, according to the agency.
CMS also issued a new rule in September designed to catch providers before they engage in fraudulent activity in Medicare, Medicaid or CHIP.
For example, if CMS determines that a key employee at an organization that bills CMS programs was previously associated with a firm that had its billing authority revoked, the agency can bar the new organization from participating in those programs.
CMS attributed the corrective actions it has already taken for declining rates of improper payments in fee-for-service Medicare. From 2016-2019, improper payments decreased by $5.32 billion to home health agencies and by $1.29 billion to suppliers of durable medical equipment, prosthetics and orthotics.