• CMS Announces Payment Error Rates for Medicare, Medicaid and SCHIP
  • December 19, 2008
  • Law Firm: King & Spalding LLP - Atlanta Office
  • The Centers for Medicare & Medicaid Services (CMS) issued its improper payment rates for Medicare, Medicaid and the State Children's Health Insurance Program (SCHIP) on November 17, 2008. As reported by CMS, the Medicare fee-for-service rate decreased from 3.9 percent in FY 2007 to 3.6 percent in FY 2008. That rate amounts to $10.4 billion.

    CMS announced its first Medicare Advantage improper payment rate, estimated to be 10.6 percent ($6.8 billion). The Medicaid composite error rate was 10.5 percent ($32.7 billion, with a federal share of $18.6 billion), while the SCHIP rate was 14.7 percent, or $1.2 billion with a federal share of $0.8 billion.

    Improper payment rates include payments that were made incorrectly but not necessarily the result of fraud. For Medicare fee-for-service, most improper payments result from medically unnecessary services or coding errors. Medicaid and SCHIP errors typically result from inadequate documentation to support claims, or payments for services rendered to ineligible beneficiaries.

    The overall Medicare improper billing rate has fallen sharply over the past decade. In 1996, the rate stood at 14 percent. CMS expects the rates for Medicare Advantage, Medicaid and SCHIP to fall over time as well.