CMS Touts Less Improper Pay Across Programs, Particularly Medicare
CMS said the most recent improper pay rates show that, for the first time since the data has been reported, improper payment rates went down in Medicare fee-for-service, Medicare Advantage, Medicaid and the Children’s Health Insurance Program, and the fiscal 2018 Medicare fee-for-service improper pay rate is at the lowest since the 2010 rate. However, many of the same areas — home health, nursing homes and inpatient rehabilitation facilities — are still driving the improper pay rate in traditional Medicare, according to the HHS fiscal 2018 financial report.
The HHS Office of Inspector General says top management challenges for 2018 include getting CMS to “take more effective actions” to reduce improper payments among certain providers, such as by implementing surety bonds for home health agencies.
While Medicare fee-for-service exceeded the agency’s target for improper payment reduction, Medicaid and CHIP did not, according to the HHS fiscal 2018 financial report unveiled earlier this month.
“While we have made progress on reducing the improper payments rate, we are not satisfied and more work needs to be done to achieve increased and consistent reductions in the future by implementing already existing initiatives as well as innovative processes,” CMS Administrator Seema Verma says in a blog post, pointing to provider enrollment and screening standards, enforcement authorities and predictive modeling as solutions.
The fiscal 2018 improper pay rate for Medicare fee-for-service includes claims processed between July 1, 2016 and June 30, 2017, according to CMS, and the financial report says the decrease in the improper payment rate to 8.12 percent during that time is due to agency actions to deal with improper payments in home health and nursing homes.
Home health improper pay decreased from almost 59 percent in the 2015 improper pay year to 17.61 percent in 2018, CMS notes.
Bill Dombi, president of the National Association for Home Care and Hospice, said the decline could be due to several factors.
“First, HHAs have been messaged multiple times over recent years by NAHC, state associations, consultants and Medicare contractors that they needed to tighten up the quality of the documentation supporting their claims. That improvement was (is) needed both for HHAs and physicians who certify home health eligibility. Second, CMS has taken some steps to clarify documentation requirements. These steps included the physician face-to-face encounter documentation. Third, the ‘probe and educate’ audits CMS conducted where just a few claims were reviewed from each HHA gave those HHAs specific education of documentation requirements and needed improvements,” Dombi said.
Dombi also said that data show Medicare home health spending has not changed materially, which demonstrates the improper payments were nothing more than documentation issues that were easily fixable by the home health agencies.
However, HHS says in its financial report that “insufficient documentation for home health claims continues to be prevalent, despite the improper payment rate decrease from 32.28 percent in FY 2017 to 17.61 percent in FY 2018.”
OIG, in a document listing top challenges for HHS in 2018, says CMS needs to take more effective actions to reduce improper payments, particularly among provider types with high rates of improper pay, such as home health providers, chiropractors, hospice, high-risk hospital services and nursing homes.
CMS, however, touts the reduction in nursing home improper pay rates. That improper pay rate fell from 9.33 percent in 2017 to 6.55 percent in 2018, the agency says. The financial report says the primary reason for the nursing home errors was that the certification or recertification statement was missing or insufficient.
American Health Care Association Senior Vice President for Reimbursement Policy Mike Cheek said his group supports CMS’ efforts to make sure Medicare pay for post-acute care is appropriate, but he also pointed to some documentation as problematic.
“For too long, Medicare program transmittals have been complex, burdensome and often open to varying interpretation,” Cheek said. “We believe CMS’ efforts to clarify and simplify policy is helpful as well as enhances provider education. AHCA/NCAL also believes the Patient-Driven Payment Model (PDPM) offers the opportunity to further enhance adequate and appropriate payment through a robust CMS education effort and a thoughtful transition plan from the current Resource Utilization Group (RUGs) system to PDPM.”
The agency also touted a decrease in durable medical equipment improper payments, and said those have decreased by $1.14 billion from 2016 to 2018. The most recent improper pay rate is 35.54 percent.
Kim Brummett with the American Association for Homecare said the decrease could be a result of CMS allowing flexibility in the documentation requirements and perhaps changing how it uses its targeted probe and educate audits. She said that in the end the error rate audits can only look at the documentation requirements that CMS has laid out, so educating DME suppliers and adjusting those requirements to make more sense goes a long way to affecting the improper payment rate. Brummett stressed that a payment could be considered improper, even though the DME was medically necessary and used by beneficiaries.
“Although the improper payment rate for [home health and SNF] services and the gross Medicare FFS improper payment rate decreased, improper payments for home health, IRF, SNF, and hospital outpatient claims were the major contributing factors to the FY 2018 Medicare FFS improper payment rate, comprising 33.24 percent of the overall estimated improper payment rate,” HHS financial report says.
The improper pay rate for hospital outpatient claims also decreased between the 2017 and 2018 measurement, and the most prevalent issue was a missing or insufficient order for services or medical necessity documentation.
Unlike the other areas driving the Medicare improper pay rate, where biggest the issues came from insufficient documentation, the main problem for inpatient rehabilitation facilities was medical necessity.
“The improper payment rate for IRF claims increased from 39.74 percent in FY 2017 to 41.55 percent in FY 2018. The primary reason for these errors was that the IRF coverage criteria for medical necessity were not met,” the financial report says.
The Council for Medicare Integrity, which represents Recovery Auditors, said, despite the large decrease, more should be done.
“A drop in the error rate to ensure more efficient oversight of taxpayer dollars is commendable, but more dollars can be saved” said Kristin Walter, spokesperson for The Council for Medicare Integrity, pointing to the limits on how many claims RACs can review.
She added: “We urge CMS and Congress to boost Medicare oversight by authorizing a new level of resource protection — prepayment claim reviews — to catch and correct Medicare billing errors before claims are paid and ensure that providers are reimbursed quickly and accurately the first time.”
Verma has previously complained that Medicare fee-for-service reviews a “ridiculously low” number of claims considering how big the program is.
The improper pay rate for Medicare Advantage, according to HHS’ financial report, is 8.1 percent, or about $15.6 billion, which is a slight decrease from the 8.31 percent from the previous year’s improper pay rate. The financial report says this was driven primarily by MA plans submitting more accurate diagnoses of beneficiaries. The majority of the errors, 58 percent, came from missing or insufficient documentation. The other 42 percent came from administrative or process errors made by MA plans, according to the report.
For Medicare Part D, the improper pay estimate for 2018 is 1.66 percent, a very slight decrease from 1.67 percent in 2017.
The Medicaid improper pay rate uses a 17-state three-year rotation for measuring improper payments, so the 2018 rate is based on measurements conducted in fiscal 2016, 2017 and 2018. The Medicaid improper pay estimate combines each state’s Medicaid fee-for-service, managed care and eligibility improper pay estimates, and for 2018 is 9.79 percent. The fee-for-service improper pay rate, however, was more than 14 percent while the managed care rate was 0.22 percent.
CHIP uses the same state sampling process as Medicaid to measure the improper pay rate, and fee-for-service, managed care and eligibility are all taken into account. The CHIP improper pay rate is weighted by state size so that states with bigger programs are factored more heavily into the national rate. The overall CHIP improper pay rate is 8.57 percent. However, the fee-for-service rate is 12.55 percent, and the managed care rate is 1.24 percent.
“The majority of CHIP improper payments have been cited on claims where a newly enrolled provider or a provider due for revalidation had not been appropriately screened by the state or a provider did not have the required NPI on the claim,” the HHS financial report says. “State compliance with screening requirements have not improved for CHIP.”