CMS Fact Sheet: New Standards Used for 2009 Improper Payments Report

For 2009, CMS improved how it reviews Medicare claims for inpatient hospital services and eliminated the use of past billing records as part of a complex medical review. As a result of this heightened scrutiny and more complete accounting of Medicare FFS claims, CMS is reporting a 2009 FFS error rate of 7.8 percent, or $24.1 billion, compared to 3.6 percent in 2008. In addition, for 2009:

• The baseline composite Medicare Advantage, or Part C, error rate, based on payment year 2007, is 15.4 percent, or $12.0 billion.
• The Medicare Part D composite error rate is under development, and three components are being reported this year: the payment system error of 0.59 percent, the low-income subsidy payment error of 0.25 percent, and payment error related to Medicaid status for dual eligible Part D enrollees 1.06 percent.
• The composite Medicaid error rate is 8.7 percent, compared to 10.5 percent for states measured in 2007.

Based on recommendations from the HHS Office of the Inspector General (OIG), Members of Congress and CMS clinical experts, the Agency modified the FFS medical review process used to identify improper payments this year. In addition, CMS is taking further steps to ensure:

• providers are submitting all required clinical and medical documents to support a claim, providers' signatures on medical documents are legible,
• a provider's claims history can no longer be used to fill in missing treatment documentation, and
• a requirement that medical information from a health care provider be included to support durable medical equipment claims, in addition to the records from suppliers.

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