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November 20, 2018

In first, CMS sees improper payments decline across Medicare, Medicaid, CHIP

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    CMS on Thursday announced the rate of improper Medicare fee-for-service (FFS) payments in fiscal year (FY) 2018 fell to its lowest rate since FY 2010.

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    CMS sees decline in improper Medicare FFS payments

    CMS said the FY 2018 improper Medicare FFS payment rate decreased to 8.12%, down from 9.51% in FY 2017. According to CMS, FY 2018 was the second consecutive year the agency's improper Medicare FFS payment rate was less than 10%. CMS said the decline in improper Medicare FFS payments from FY 2017 to FY 2018 represented a $4.59 billion decrease in estimated improper payments.

    CMS said the decline was largely driven by decreases in improper payment claims for:

    • Durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS);
    • Home health care services; and
    • Skilled nursing facility services.

    In particular, CMS said the improper payment rate for:

    • DMEPOS decreased from 46.26% in FY 2016 to 35.54% in 2018, representing "a $1.14 billion decrease in estimated improper payments from 2016 to 2018";
    • Home health care services decreased from 58.95% in FY 2015 to 17.61% in FY 2018, representing a "$6.92 billion decrease in estimated improper payments from 2015 to 2018"; and
    • Skilled nursing facility services decreased from 9.33% in FY 2017 to 6.55% in FY 2018, representing "a $1.04 billion decrease in estimated improper payments from 2017 to 2018."

    CMS said FY 2018 marks "the first year in improper payment reporting history that the Medicare … FFS, Medicare Part C, Medicare Part D, Medicaid and [CHIP] achieved reductions in all five programs' improper payment rates." CMS did not provide details on the decline in improper payments for the other programs.

    Verma says 'targeted' efforts helped curb improper payments

    CMS Administrator Seema Verma said, "Our accomplishments over the past year were the result of a focused effort to target root causes of improper payments. CMS also implemented a targeted review strategy that focused on provider education, assistance, and burden reduction."

    Verma added, "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." Specifically, Verma said CMS plans to streamline its process for electronic authorization, increase awareness of documentation and prior authorization requirements via electronic health records, and expand the use of prior authorization for DMEPOS (Dickson, Modern Healthcare, 11/16; Richman, FierceHealthcare, 11/16; Holly, Home Health Care News, 11/18; Spanko, Skilled Nursing News, 11/16).

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