The Center for Medicare & Medicaid Services (CMS) reports that improper payments for Medicare fee-for-service (FFS) decreased from 3.9 percent in fiscal year (FY) 2007 to 3.6 percent, or $10.4 billion, in FY 2008.
In addition to improved Medicare FFS payments for FY 2008, CMS reports its first Medicare Advantage improper payment rate of 10.6 percent, or $6.8 billion, in payments made in Calendar Year (CY) 2006. Also being reported for the first time are the FY 2007 national composite error rates for Medicaid and for SCHIP. The Medicaid composite error rate is 10.5 percent, or $32.7 billion, of which the federal share is $18.6 billion. For SCHIP, the rate is 14.7 percent, or $1.2 billion, with a federal share of $0.8 billion.
The Medicare, Medicaid, and SCHIP improper payment rates are issued annually as part of the HHS Agency Financial Report. Improper payment rates include those payments that may have been paid incorrectly and do not necessarily reflect fraud. For Medicare FFS, most improper payments are due to claims for services that were medically unnecessary or incorrectly coded. The vast majority of Medicaid and SCHIP errors are due to inadequate documentation. Providers either did not submit information to support their FFS or managed care claims or did not submit additional data when requested, a similar trend seen with Medicare Parts A and B in previous years. Other errors are due to services provided under Medicaid or SCHIP to beneficiaries who were not eligible for either program or who were not eligible for the services received.
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