Improper payment rates decline in 2001
The Department of Health and Human Services (HHS) recently reported that the rate of improper Medicare payments continued to decline last year. The improper payment rate, which estimates the portion of Medicare fee-for-service payments that do not comply with Medicare laws and regulations, was 6.3% in fiscal year 2001, compared with 6.8% in fiscal year 2000.
This is less than half the 13.8% estimated in 1996, the first year HHS’ Office of Inspector General (OIG) calculated the rate. For fiscal year 2001, medical reviewers examined the medical records behind 6,594 claims filed on behalf of 600 beneficiaries nationwide. These were randomly selected by OIG from the total 34 million beneficiaries enrolled in fee-for-service Medicare. About 931 million fee-for-service Medicare claims were filed in 2001. The improper payments fall into these categories:
- "Medically unnecessary" services — Usually cases in which medical reviewers determined that the beneficiary’s condition did not warrant inpatient hospital care, but did warrant a lower level of care (43.2% of improper payments in 2001);
- Documentation deficiencies — Instances where medical records were insufficient to support the claims, or nonexistent (42.9%);
- Miscoding — Services found to be coded for a higher level of care than was supported by the medical records (17%).
The claims involve fee-for-service payments to physicians, hospitals, and other health care providers. The Centers for Medicare & Medicaid Services, which administers the Medicare program, takes steps to recover all improper payments identified by the OIG review — many have already been recovered, the OIG report said.
The improper payment rate does not measure fraud, although some overpayments could be the result of fraud. The audit process does not attempt to determine the exact cause of the error.
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