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CMS Continues Push to Reduce Improper Payments Under the Medicare Program

December 10, 2020

Rasa Fumagalli, JD, MSCC, CMSP-F

The Centers for Medicare & Medicaid Services (CMS) recently issued a press release announcing a steady decline in improper payments under the Medicare Fee-For-Service program over the past few years. The improper payment rate decreased to 6.27% in the fiscal year 2020, down from 7.25% in the fiscal year 2019. CMS estimated that their corrective actions prevented approximately $15 billion dollars in improper payments. The corrective actions were based on the identification of root causes of improper payments.  According to the release, “improper payments represent payments that don’t meet program requirements– intentional or otherwise–and contribute to inaccurate spending of Americans’ tax dollars but are not all representative of fraud. Rather, improper payments might be overpayments or underpayments, or payments where sufficient information was not provided to determine whether a payment is proper or not.” CMS’ corrective action strategy will include the leveraging of new technology to allow the Medicare program to more efficiently review compliance on more claims and reduce improper payment rates.

Improper payments may be made under the Medicare Fee-For-Service program for a variety of reasons. The Medicare Secondary Payer Act clearly outlines Medicare’s position as a secondary payer when “payment has been made or can reasonably be expected to be made” under a workers’ compensation law, automobile, or liability policy or plan or under no-fault insurance. Given the focus on reducing improper payments from the Medicare Trust Fund, parties should be sure to address the potential compliance issues in settlements involving a Medicare beneficiary.

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