On July 9, 2014, the U.S. government was subject to a frenzy of media attention after the announcement that federal agencies made nearly $100 billion in improper payments in 2013. This information was reported after a hearing held by the House Oversight government operations subcommittee. While this improper payment amount encompasses all government agencies, the Medicare (Fee-for-Service) program topped the list of all improper payments made by government agencies at $36 billion. The remaining programs administered by the Centers for Medicare & Medicaid Services (CMS) also accounted for large portions of the $100 billion in overpayments:

• Medicare (Fee- for Service) = $36 billion
• Medicaid = $14 billion
• Medicare Advantage (Part C) = $12 billion
• Medicare Prescription Drug Benefits (Part D) = $2 billion

Federal agencies across functions are required to report improper payments which comprise of overpayments, underpayments, and payments made to the incorrect party. When it comes to the government’s health plans, there are five factors that contribute to the improper payments stemming from CMS programs, including:

1. Clerical errors
2. Mistakes in awarding benefits
3. Services not verified as medically necessary
4. Missing or incorrect documentation from providers
5. Fraudulent or falsified claims

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To help monitor improper payments, CMS implemented the Comprehensive Error Rate Testing (CERT) program within the Medicare Fee-for-Service (FFS) arena. This program examines approximately 40,000 claims that were submitted to the Part A/B Medicare Administrative Contractors (MACs), as well as to the Durable Medical Equipment MACs (DMACs). These claims are reviewed to determine is correct coding and billing methods were used, as well as if appropriate medical records or documentation was submitted, if necessary.

In January, 2014, the CMS CERT program released its “Appendices Medicare FFS 2013 Improper Payments Report”. The below chart indicates the overall overpayment rate for the fiscal year 2013, and represents $36 billion in improper payments. (source)

In addition to provider types, the reports generated by the CERT program identify improper payment rate by provider specialties. The specialties are assigned an Improper Payment Rate, and the types of errors are identified, ranging from:

• No documentation
• Insufficient documentation
• Medical necessity
• Incorrect coding
• Other errors

According to the CMS, the five specialties with the highest Improper Payment Rate are:

1. Chiropractic = 51.7%
2. Hospital visit – initial = 28.3%
3. Lab tests – other (non-Medicare fee schedule) = 26.1%
4. Hospital visit – critical care = 22.9%
5. Specialist – psychiatry = 21.5%

The majority of these Improper Payment Rates are attributed to error types: insufficient documentation and improper coding.

Context 4 Healthcare can help providers address these challenges with our clinical editing solution. ClaimsEditor^® plays an instrumental role by utilizing advanced clinical editing technology to ensure that both institutional and professional claims are properly coded and compliant with applicable payer requirements. ClaimsEditor^® examines the whole claim and identifies procedure-to-diagnosis mismatches, unbundling occurrences, use of nonspecific diagnosis codes, global service violations, potential unbilled revenue, and many other problem areas that can adversely affect not just claims processing, but a provider’s overall practice. Claims editor is deployed using cloud or client server based technologies.

Want more Compliance Edge articles? RAC Audit Identifies Overpayments for Billing Incorrect DME Codes

ARTICLE SOURCES:

http://www.foxnews.com/politics/2014/07/09/government-made-100b-in-improper-payments/

http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/CERT/index.html?redirect=/cert

http://www.usa.gov/