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November 24, 2009:

The calculations of Medicare fee-for-service error rates in 2009 will be significantly improved by the Centers for Medicare and Medicaid Services (CMS) and the Department of Health and Human Services, with an eye toward reducing waste, fraud, and abuse in the Medicare entitlement program. The new calculations will reflect a more complete accounting of Medicare’s improper payments than in previous years so that CMS can target improper payments more efficiently. 

CMS has stated that improper payments do not necessarily indicate that a provider is committing fraud, but such payments do provide the agency with information needed to provide better oversight and education to providers. In fact, HHS and CMS are planning to invest more time and resources into working with providers to eliminate errors through increased and improved training and education outreach.

Because of the new and improved claim reviews and increased scrutiny, CMS is reporting a 2009 fee-for-service (FFS) error rate of 7.8 percent, or $24.1 billion, compared with 3.6 percent in 2008. 

Based on recommendations from the HHS Office of Inspector General (OIG), members of Congress, and CMS clinical experts, the FFS medical review process has been modified to better identify improper payments for 2009. CMS is also taking steps to guarantee that: 

  • Providers are submitting all required clinical and medical documents to support a claim
  • Providers’ signatures on medical documents are legible
  • A provider’s claims history can no longer be used to fill in missing treatment documentation
  • Medical information from a health care provider be included to support durable medical equipment claims, in addition to the records from suppliers

“The Obama Administration is committed to strengthening and improving the Medicare and Medicaid systems and doing everything we can to be responsible and vigilant stewards of these programs that millions of Americans rely upon,” said HHS Secretary Kathleen Sebelius.  “From the very start of the administration, the president has directed all the agencies across government to use honest budgeting and to take the hardest, most detailed look possible at what was happening with taxpayer dollars inside our agencies and inside critical programs. 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. “

Deborah C. Hall
Clinical/Technical Editor


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