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Comprehensive Error Rate Testing (CERT)

The Centers for Medicare & Medicaid Services (CMS) calculates the Medicare Fee-for-Service (FFS) improper payment rate through the Comprehensive Error Rate Testing (CERT) program. Each year, CERT evaluates a statistically valid random sample of claims to determine if they were paid properly under Medicare coverage, coding, and billing rules.


The fiscal year (FY) 2014 Medicare FFS program improper payment rate is 12.7 percent, representing $45.8 billion in improper payments, compared to the FY 2013 improper payment rate of 10.1 percent or $36.0 billion in improper payments1. The table below outlines the improper payment rate and projected improper payment amount by claim type for FY 2014. The reporting period for this improper payment rate is July 1, 2012 -June 30, 2013.

Service Type Improper Payment Rate Improper Payment Amount2
Inpatient Hospitals 9.2% $10.4B
Durable Medical Equipment 53.1% $5.1B
Physician/Lab/Ambulance 12.1% $11.0B
Non-Inpatient Hospital Facilities 13.1% $19.2B
Overall 12.7% $45.8B

All public reports produced by the CERT program are available through the "CERT Reports" link on the section navigation tray to the left. The improper payment rate is released annually in the HHS AFR in the “Other Accompanying Information” section, which can be accessed through the HHS AFR link in the Related Links section at the bottom of this page.


1 The national overall and inpatient hospital improper payment rates are adjusted for the impact of Part A to B rebilling of denied inpatient claims.  

As of the cutoff date for the FY 2014 Medicare FFS improper payment rate, approximately 670 claims were pending final Administrative Law Judge (ALJ) appeal adjudication. Historically, claims have been fully overturned by the ALJ at an average rate of 28.6 percent.  If sufficient time was allowed for the pending appeals to complete final adjudication and this historical overturn rate above continued, the overall FY 2014 improper payment rate would be lowered by 0.2 percentage points to 12.5 percent, or $44.9 billion in projected improper payments.

2 Columns may not sum correctly due to rounding.