Improper Medicare payments hit lowest level in nearly a decade

More targeted enforcement actions by the CMS has led to the lowest improper payment rate for Medicare in nearly a decade, according to new federal data.

The CMS doled out an estimated $31 billion in improper payments in fiscal 2018, which is around 8.12% of all claims paid during that period, according to a report issued Friday. That's down from $36.2 billion or 9.51% of Medicare claims in fiscal 2017.

Improper payments include fraudulent claims, payments distributed to the wrong recipient or for the wrong amount, payments with insufficient documentation, and those when the recipient uses the funds improperly.

The CMS calculations include all claims incorrectly paid between July 1, 2016, and June 30, 2017. This is the lowest rate of improper payments for Medicare fee-for-service since 2010 and the second time since 2013 that the rate fell below 10%.

The home health sector continued to see sizable improvements, with the improper payment rate dropping from 58.9% in 2015 to nearly 30% in 2017 and 17.6% in 2018.

The agency said a multifaceted strategy—including creating a more targeted claims auditing process that focused on the highest-risk providers—helped bring the improper payment rate down.

It has also spent the last year trying to reduce the regulatory burden on providers.

"One of my commitments as the administrator of the CMS is to ensure we remain steadfast in our commitment to strengthen Medicare by making sure that tax dollars are spent appropriately," CMS Administrator Seema Verma said in a statement.

Going forward, the CMS said it is looking at other methods now used in the private sector to cut down on improper payment, including greater use of prior authorization for some services like the use of durable medical equipment.

It is also seeking to make providers more aware of documentation and prior authorization requirements via electronic health record systems.