Medicare Part D Improper Payment Measurement

The Centers for Medicare & Medicaid Services (CMS) implements a systematic plan for identifying, measuring, and reporting improper Medicare Part D payments annually. Since fiscal year (FY) 2008, CMS has submitted an annual Part D improper payment estimate and the estimation methodology to Congress in the Agency Financial Report (AFR). This page highlights important details about the payment error rate and offers valuable links and resources for further exploration, with accessible navigation options for all users.

Part D Payment Error Rates from FY 2016 – FY 2023

In FY 2023, CMS implemented methodology refinements that contributed to an increase in the FY 2023 improper payment rate estimate (3.72%). The increase from the prior year’s estimate of 1.54% is attributed to the multiple methodological changes implemented for the FY 2023 improper payment estimate. Due to the methodology changes introduced in FY 2023, the rates for FY 2022 and FY 2023 are not comparable. A baseline for improper payments in Medicare Part D has not yet been established, as the FY 2023 estimate reflects numerous methodology changes. 

Table 1 presents results from the Part D Payment Error Estimates for FY 2016 – FY 2023.

Table 1.  Part D Payment Error Estimates for FY 2016 – FY 2023