The Centers for Medicare and Medicaid Services made approximately $24 billion in improper payments to physicians and other vendors in fiscal year 2009, an error rate that was almost double the rate of the previous year.
In fiscal year 2009, 7.8% of Medicare fee-for-service claims were paid in error, compared with 3.5% in fiscal year 2008, said the agency in a statement. The CMS said that the increase in the error rate resulted largely from a change in how it identified improper payments.
“This year, we made the call to stop calculating our error rate in fee-for-service Medicare the way that the previous administration did and to start using a more rigorous method in calculating this rate in keeping with our mandate to root out errors and fraud,” Health and Human Services Secretary Kathleen Sebelius said in a statement.
The CMS assesses the accuracy of its Medicare payments each year and includes an accounting in the HHS Agency Financial Report.
The agency calculates Medicaid error rates in a different way, and does not yet have statistics for fiscal year 2009. It uses a 17-state sample to calculate the national error rate; each state is reviewed once every 3 years. According to the most recent assessment, the Medicaid error rate decreased from 10.5% in fiscal year 2007 to 8.7% in fiscal year 2008. The reporting of an error rate for the Children's Health Insurance Program (CHIP) has been suspended while the CMS develops a new way to assess the payments, as directed by the reauthorization of CHIP earlier this year.
The agency is also still developing measures for the Medicare Advantage program and for Medicare Part D. But the baseline for Medicare Advantage was 15.4% in 2007, accounting for $12 billion paid out in error.
The CMS said that the higher improper payment rate is not necessarily an indicator of greater fraud. Rather, it was “a more complete accounting of errors,” according to Ms. Sebelius.
To ensure that physicians and other health care providers are not inappropriately accused of fraud, the CMS is working to ensure that they submit all required clinical and medical documents to support a claim, and that signatures on documents are legible. Durable medical equipment claims will have to include medical information from a health care provider in addition to suppliers' records.
“As we move forward in our review of the Medicare and Medicaid error rate data, we expect to be able to determine if there are specific trends that can better help us identify weaknesses in our programs or systems,” said acting CMS Administrator Charlene Frizzera in a statement.