Just In: $4.6 Billion Reduction in Medicare Improper Payments


Did you know that each year, there are thousands of Medicare payments made in error?

Good news for Medicare: the 2018 rate of improper payments is down the lowest it has been since 2010. Perhaps most importantly, the Medicare fee-for-service improper payment rate went down to 8.12 percent from 9.51 percent.

This means savings at a level of $4.59 billion from fiscal year 2017 to fiscal year 2018.

Reductions in improper payments in all 5 programs

There were reductions in improper payments this year in all of the 5 major Medicare programs:

  • Medicare Fee-for-Service
  • Medicare Part C
  • Medicare Part D
  • Medicaid
  • The Children’s Health Insurance Program

What are Medicare improper payments?

An improper payment is when any payment is made in error or in an incorrect amount. Examples are duplicate payments or payments to ineligible recipients.

Home health care

The Centers for Medicare and Medicaid Services (CMS) have been working on ways to reduce improper payments, many of which have been occurring in home health care, which is down from 59 percent in 2015 to 17.61 percent in 2018. Home health improper payments are down $6.92 billion from 2015 to 2018. It seems this year they have been successful.

Skilled nursing facility improper payments and durable medical equipment (DME) improper payments are also down.

How did CMS reduce improper payments?

Some of the means CMS has used to reduce improper payments are:

  • Prior authorization
  • Claim error corrections
  • Provider education on Medicare policy
  • Simplifying policies

This downward trend is good news that Medicare is keeping a closer look on its policies and payments so that illegitimate payments do not occur. Medicare is a complex system that can be taken advantage of, but these steps in the right direction are a good sign for Medicare’s future.

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