Reducing Payment Errors and Stopping Fraud in Medicare

Reducing Payment Errors and Stopping Fraud in Medicare


Reducing Payment Errors and Stopping Fraud in Medicare. 7 May 2002. Washington: United States Department of Health and Human Services.

CMS is taking a two-pronged approach to reducing payment errors: educate providers to reduce mistakes and “Addressing program vulnerabilities by promoting voluntary compliance while focusing anti-fraud resources on the small fraction of providers trying to defraud the program.”

According to CMS Medicare error rates have been dropping rapidly. “Medicare’s estimated error rate has fallen by more than half, from 14 percent in fiscal year 1996 to 6.3 percent in fiscal year 2001, according to annual independent reviews conducted by the HHS Office of Inspector General (OIG). The error rate measures payments made by Medicare which are not properly supported by health care providers’ documentation or which otherwise do not meet Medicare reimbursement requirements. The error rate does not measure fraud or abuse in the Medicare program.”

CMS is starting to help Medicaid programs measure payment accuracy. “CMS is working with states to develop Medicaid payment accuracy measurement (PAM) methodologies that can be used both on a state-specific and national basis. In fiscal year 2002, CMS received $2.7 million in Health Care Fraud and Abuse Control (HCFAC) Program funds to continue an initiative that would develop a single payment accuracy measurement methodology appropriate to all states. The nine states that applied and were approved to participate in a pilot program were Louisiana, Minnesota, Mississippi, New York, North Carolina, North Dakota, Texas, Washington and Wyoming. While most of the pilots are focusing on fee-for-service payments, Minnesota will be addressing the validation of managed care encounter data. The initial pilot studies will be completed by the end of 2002. CMS plans to expand the PAM pilot to about 15 states in fiscal year 2003.”