CMS recently reported a reduction in the rate of improper Medicare Fee-For-Service (FFS) payments from 11.0 percent in 2016 to 9.5 percent in 2017, a nearly $5 billion decrease in estimated improper payments. The Medicare FFS improper payment rate has not been below the 10 percent threshold for compliance, established in the Improper Payments Elimination and Recovery Act, since 2013. Most of the improper payments resulted from errors in the documentation to support payment. In these instances, CMS was not able to determine whether the billed items or services were actually provided, billed at the appropriate level, or medically necessary. Other improper payments resulted from payments for claims that should not have been made, or should have been made in a different amount. These amounts represent a known “monetary loss” to the Medicare program.
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The estimated known monetary loss due to improper payment rate is 3.0 percent. This amount represents an estimated known monetary loss of $11.3 billion out of the estimated improper payments, which total $36.2 billion. In the graphic below, CMS illustrates the breakdown of improper payments and improper payments by monetary loss according to the type of error.
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