Medicare FFS Improper Payment Rate Drops

Medicare FFS Improper Payment Rate Drops

Way to go providers!

More often than not, we write about the “bad actors” in healthcare and the volume of fraud taking place. Today, we are excited to share a good news story. Maybe even a great news story!  

On Wednesday, November 15, Kimberly Brandt, Principal Deputy Administrator for Operations for CMS announced that the Medicare Fee-For-Service (FFS) improper payment rate is below 10%. It decreased from 11.0% in 2016 to 9.5% in 2017. This is the first time since 2013 that the Medicare FFS improper payment rate is below the threshold established in the Improper Payments Elimination and Recovery Act of 2010. Should I say it again? Yes, it DECREASEDWay to go providers!  

It was refreshing to read in the CMS Blog the acknowledgment that not all improper payments are fraud. Generally speaking, it seems the messaging we hear most frequently is about the high volume of fraud, waste, and abuse that is taking place in healthcare today. But in Ms. Brandt’s blog, she stated, “Improper payments are not always indicative of fraud, nor do they necessarily represent expenses that should not have occurred. For example, instances where it is insufficient or no documentation to support the payment as proper are cited as improper payments under current Office of Management and Budget guidance”.  

The blog goes on to say that the majority of Medicare FFS improper payments are due to documentation errors where Centers for Medicare and Medicaid simply couldn’t determine if the billed items or services were actually provided, billed at the proper level and/or were medically necessary. When you look at the information provided by CMS you see that 64% of the Medicare FFS improper payments were attributed to insufficient documentation and another 2% is attributed to no documentation at all.  

Figure 1: FY 2017 Medicare FFS Improper Payments (in Millions) and Percentage of Improper Payments by Monetary Loss and Type of Error

Medicare FSS Improper Payments

Consider this, 66% of the “improper” payments can be addressed by a provider’s ability to do a better job of documentation. How many times as compliance officers have you had to say to a clinician, “If it isn’t documented, it didn’t happen”? I can definitely say that when I was a compliance officer that was an unfortunate discussion that occurred way too often.  

Every year we work to find the most creative and effective ways to educate healthcare providers on the vast regulatory requirements of healthcare. In addition to our own materials, we have a commitment from CMS and the Office of Inspector General (OIG) to continue to provide educational materials and resources to assist healthcare providers to reduce fraud, waste, and abuse. Based on the information shared by CMS, it appears we are doing a great job reducing the improper payment rate.   

Next year’s reduction could be even greater if we add some focus to the improvement in documentation into our 2018 plan.

Here are a few ideas:

  • Update your compliance plan to include an audit of your clinical documentation.
  • Review the Medicare guidelines to make sure you are familiar with what the “auditors” consider “necessary” documentation to support the claim.
  • Talk to the person or team who handles the claims “dispute” process for your organization to see if they have identified any patterns of documentation issues that could/should be addressed.

The healthcare industry as a whole has worked so hard to build compliance programs and billing systems that have reduced the number of improper billings that lead to improper payments. This means that systems, compliance planning, and people are all working together to make healthcare more efficient and compliant. That is something we can all take pride in and celebrate.

What are your thoughts? Send us a comment below!


Written by Donna Thiel, Chief Compliance Officer

Donna Thiel is the Director of our Compliance Integrity team, a consulting division of ProviderTrust. Donna works with compliance officers across the country to help reduce the stress and anxiety of this very difficult role.
Connect with Donna on LinkedIn 

Stay Up-to-Date

Subscribe and get the latest news and advice from industry experts delivered straight to your inbox.

Related Resources

Never miss an update

Get the latest healthcare news, advice from industry experts, and all things related to monitoring solutions delivered straight to your inbox.