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Payment Error Rates for DME, Physician/Lab/Ambulance Have Largest Jump in 2012

December 14, 2012:

Although the overall payment error rate fell by 0.1 percentage point in 2012, it actually increased for a few types of services, with DME and physician/lab/ambulance heading the list.

On November 21, 2012, the Centers for Medicare and Medicaid Services released the 2012 improper payment error rates as measured through the Comprehensive Error Rate Testing (CERT) program. CERT, put into place as required by the Improper Payments Information Act, aims to accurately evaluate the performance of Medicare contractors as well as determine the causes of errors among providers. Reviewing these figures annually can reveal which sectors of the health care industry are improving from an error perspective and which sectors are heading in the wrong direction. Government and private payer auditors could decide to keep a more watchful eye on those areas requiring improvement, which means providers should, too.

Although there was an overall drop in the error rate across the program from 8.6 to 8.5 percent, there are increases in several of the provider sectors.

Error Rate and Projected Improper Payment by Claim Type:

Service Type November 2011 Report November 2012 Report
Inpatient hospitals 7.9% 6.8%
DME 61.0% 66.0%
Physician/lab/ambulance 9.2%
Noninpatient hospital facilities 4.4% 4.8%
Overall 8.6% 8.5%

There was a significant increase in errors found in the durable medical equipment (DME) sector, as well as a small increase among physician/lab/ambulance and noninpatient hospital facilities.

The detailed report for these figures will likely not be available until late 2013. However, the detailed report for the 2011 Medicare Improper Payments Report was just made available, giving us some insight into the November 2011 figures. One of the most significant errors for inpatient care was incorrect setting; patients who were actually outpatients were being admitted as inpatients. Insufficient documentation led to 91 percent of the errors in the DME sector, and for physician services, a large portion of the problem continues to be with evaluation and management services, with the ongoing issues of incorrect coding and improper documentation.

Many other errors were uncovered that providers can learn from and incorporate into their own compliance programs. Review the entire 2011 Improper Payments Report at http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/CERT/Downloads/MedicareFFS2011CERTReport.pdf.


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