Rate of improper Medicare payments down in 2001

May 1, 2002

Pharmaceutical Representative

The Department of Health and Human Services has reported that the rate of improper Medicare payments continued to decline last year.

The Department of Health and Human Services has reported that the rate of improper Medicare payments continued to decline last year. The improper payment rate, which estimates the portion of Medicare fee-for-service payments that do not comply with Medicare laws and regulations, was 6.3% in fiscal year 2001, compared with 6.8% in fiscal year 2000.

"We are continuing to make significant improvements to ensure that payments for Medicare services are accurate and correctly documented," said HHS Secretary Tommy G. Thompson. "We are also working to make our procedures and rules more understandable through our regulatory reform efforts, which will help physicians and other providers avoid unintended errors."

Improper payments

For fiscal year 2001, reviewers examined the medical records behind 6,594 claims filed on behalf of 600 beneficiaries nationwide. These were selected randomly by the Office of the Inspector General from the total 34 million beneficiaries enrolled in fee-for-service Medicare.

Improper payments include cases in which:


•Â Medical reviewers determine that the beneficiary's condition did not warrant inpatient hospital care, but did warrant a lower level of care (43.2% of improper payments in 2001).


•Â Medical records are insufficient to support the claims or nonexistent (42.9%).


•Â Services are found to be coded for a higher level of care than was supported by the medical records (17%).

The claims involve fee-for-service payments to physicians, hospitals and other healthcare providers. The Centers for Medicare and Medicaid Services, which administers the Medicare program, takes steps to recover all improper payments identified by the OIG review - many have already been recovered, the OIG report said.

More to be done

If the findings of the review were projected, the fiscal year 2001 rate would represent an estimated $12.1 billion in improper payments out of the total $191.8 billion in fee-for-service Medicare payments - compared with $11.9 billion in fiscal year 2000, out of the total $173.6 billion in payments that year.

"CMS has shown continued vigilance in the actions it has taken to lower the rate of improper payments in Medicare," said HHS Inspector General Janet Rehnquist. "Now it's imperative to continue helping providers to understand and comply with the rules and procedures that are in place to ensure that Medicare's dollars are spent correctly." PR

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