Medicare Improper Payments Remain Above Legal Threshold Four Years in A Row


February 1, 2017        

CONTACT: Kristin Walter
(202) 898-0995

Medicare Improper Payments Remain Above Legal Threshold Four Years in A Row 

Washington, D.C. – The Centers for Medicare and Medicaid Services’ (CMS) Comprehensive Error Rate Testing (CERT) program has released a new report detailing the FY2016 Medicare Fee-For-Service (FFS) billing error rate – which landed at 11 percent and equates to a loss of $41.1 billion from Medicare in a single year. Evaluating a statistically valid random sample of claims to determine if they were paid properly under Medicare coverage, coding, and billing rules, the CERT error rate estimates the percentage of Medicare FFS claims billed erroneously and then improperly paid out each year.

Medicare loses more money to over billing than any other program government-wide. The CERT error rate has remained above the Congressionally-mandated 10 percent maximum for the past four years in a row, putting Medicare at the top of the Office of Management and Budget’s (OMB) problem-program watch list. Although the rate has trended slightly downward from FY2014, improper payments still remain higher than is permitted.

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For the past three years, more than $130 billion was inappropriately drained from the Medicare Trust Fund due to improper payments. Medicare continues to lose tens of billions of dollars each year despite grave warnings from healthcare officials that the Medicare Trust Fund will be insolvent by 2028 – just 11 years from now.

Congress mandated the creation of the Recovery Audit Contractor (RAC) Program to review post-payment Medicare claims, identify misbillings and recover resources inappropriately paid out from the Medicare Trust Fund. Reviewing only 2 percent of a provider’s Medicare claims, auditors have recovered more than $10 billion in improper payments, prolonging the life of Medicare by two full years.

“Despite the fact that the RAC Program is wildly successful in recovering billions of mis-spent Medicare dollars and that the CERT error rate remains above the legal threshold, provider complaints have pushed CMS to greatly scale back auditing. RAC auditors are now limited to reviewing just .05% of a provider’s claims – this defies logic,” said Kristin Walter, spokesperson for the Council for Medicare Integrity. “With more than $166 billion erroneously paid out to providers over the past four years, it’s clear we need much more auditing oversight, not less, to preserve the Medicare program and protect the taxpayer dollars allocated to providing our nation’s seniors with important healthcare services.”

For more information, please visit: www.medicareintegrity.org.


About the Council for Medicare Integrity
The Council for Medicare Integrity is a 501(c)(6) non-profit organization. The Council’s mission is to educate policymakers and other stakeholders regarding the importance of healthcare integrity programs that help Medicare identify and correct improper payments.

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