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Medicare FFS Jurisdiction Error Rate Contribution Data


Medicare FFS Jurisdiction Error Rate Contribution Data

Background on Medicare Fee-for-Service (FFS) Improper Payments and Corrective Actions

The Centers for Medicare & Medicaid Services (CMS) is dedicated to continually strengthening and improving the Medicare program, which provides vital services to millions of Americans. We take our responsibility to address program integrity vulnerabilities and challenges very seriously.

CMS is committed to reducing improper payments in our programs. It is important to note that improper payments are not a measure of fraud or abuse. Instead, improper payments are payments that did not meet statutory, regulatory, administrative, or other legally applicable requirements. Many result from insufficient documentation to determine whether the service or item was medically necessary (for more information, read Interpreting the Maps and Data below). CMS uses data from the Comprehensive Error Rate Testing (CERT) program and other sources of information to address improper payments in the Medicare FFS program through various corrective actions. Each year, the Department of Health and Human Services’ Agency Financial Report outlines actions the agency will implement to prevent and reduce improper payments. While some corrective actions have been implemented, others are in the early stages of implementation. These focused corrective actions will have a larger impact over time as they become integrated into business operations.

To reduce improper payments within the Medicare FFS program, CMS has developed a number of prevention and detective measures. CMS is taking a widespread approach that includes policy clarifications and simplifications, when appropriate, as well as Targeted Probe and Educate reviews, which include more individualized provider education through smaller probe reviews followed by specific education based on the findings of these reviews. CMS is also continuing prior authorization initiatives, which help to make sure applicable coverage, payment, and coding rules are met before services are rendered and claims are submitted for payment, while ensuring access to and quality of care.

CMS and the Medicare Administrative Contractors (MACs)1 aim to help improve provider compliance with Medicare FFS policies and requirements. Provider compliance is fundamental to reducing improper payment rates. Both CMS and MACs are engaged in continual processes to identify and execute new and promising practices to improve provider compliance. CMS works closely with all MACs to develop MAC-specific Improper Payment Reduction Strategies in response to the Medicare FFS Improper Payments results and other data.

1. MACs are CMS contractors that serve as the primary point of contact for enrolling Medicare providers, providing education to providers on Medicare coverage and billing requirements, and processing payments of Medicare FFS claims for Medicare providers’ respective jurisdictions.

 

Medicare FFS Jurisdiction Error Rate Contribution Score

CMS’s increased focus on transparency and accountability, as well as ongoing work with MACs to ensure provider compliance with Medicare policies and regulations, will lead to a lower rate of improper payments, while transforming our health system to one that puts the patient first and supports innovative approaches to improve quality, accessibility, and affordability. The following maps display the 2015, 2016, and 2017 improper payment rate information for the Medicare FFS program for A/B, Home Health/Hospice, and Durable Medical Equipment (DME) MAC jurisdictions. The jurisdictions listed below are based on the MAC jurisdictions assigned during the 2015, 2016, and 2017 Medicare FFS improper payment report periods (i.e., July 1, 2013 – June 30, 2014, July 1, 2014 – June 30, 2015, and July 1, 2015 – June 30, 2016, respectively).

An Error Rate Contribution Score was assigned to each jurisdiction to reflect two key variables, the jurisdiction’s:

  • Improper payment rate and
  • Share of national improper payments

To calculate these scores, each jurisdiction was given a ranking of 1-5 based on its performance on these variables, as shown in the charts below. 

 

Improper Payment Rate:
Home Health/Hospice and DME MACs

1

0.0% - 9.9%

2

10.0% - 19.9%

3

20.0% - 29.9%

4

30.0% - 39.9%

5

40.0% and above

 

Improper Payment Rate:
A/B MACs

1

0.0% - 3.9%

2

4.0% - 7.9%

3

8.0% - 11.9%

4

12.0% - 15.9%

5

16.0% and above

Share of Improper Payments

1

0.0% - 2.9%

2

3.0% - 5.9%

3

6.0% - 8.9%

4

9.0% - 11.9%

5

12.0%  and above

   

The jurisdiction scores for the two variables (improper payment rate and share of improper payments) are multiplied together to develop an Error Rate Contribution Score. 

Error Rate Contribution Score

 

Low (0-8)

 

Medium (9-15)

 

High (16-25)

 

 

 

2015 Medicare FFS Improper Payments

(Report Period: July 1, 2013 – June 30, 2014)

 

2015 Home Health/Hospice MAC Error Rate Contribution Score

2015 Home Health/Hospice MAC Error Rate Contribution Score

 

2015 A/B MAC Error Rate Contribution Score

2015 A/B MAC Error Rate Contribution Score

 

2015 DME MAC Error Rate Contribution Score

2015 DME MAC Error Rate Contribution Score

 

2016 Medicare FFS Improper Payments

(Report Period: July 1, 2014 – June 30, 2015)

 

2016 Home Health/Hospice MAC Error Rate Contribution Score

2016 Home Health/Hospice MAC Error Rate Contribution Score

 

2016 A/B MAC Error Rate Contribution Score

2016 A/B MAC Error Rate Contribution Score

 

2016 DME MAC Error Rate Contribution Score

2016 DME MAC Error Rate Contribution Score

2017 Medicare FFS Improper Payments

(Report Period: July 1, 2015 – June 30, 2016)

 

2017 Home Health/Hospice MAC Error Rate Contribution Score

2017 Home Health/Hospice MAC Error Rate Contribution Score

 

2017 A/B MAC Error Rate Contribution Score2

2017 A/B MAC Error Rate Contribution Score

 

2017 DME MAC Error Rate Contribution Score

2017 DME MAC Error Rate Contribution Score

2. The Railroad Retirement Board (RRB) Medicare Administrative Contractor processes Part B claims for Railroad Retirement beneficiaries nationwide. As a national contractor, the RRB is not depicted separately. Information on the RRB’s error rate contribution score can be found by clicking anywhere on the map.

Interpreting the Maps and Data

When reviewing this data, it is important to understand the following:

  • It is important to remember what improper payments are and why they happen. Improper payments are not always indicative of fraud, nor do they necessarily represent expenses that should not have occurred. The improper payment rate is a measure of compliance with and adherence to federal rules and requirements. Under current Office of Management and Budget guidance, instances where there is insufficient or no documentation to support the payment as proper are cited as improper payments. The majority of Medicare FFS improper payments are due to documentation errors where CMS could not determine whether the billed items or services were actually provided, were billed at the appropriate level, and/or were medically necessary. In other words, when payments lack the appropriate supporting documentation, the payments’ validity cannot be determined. These are payments where more documentation is needed to determine if the claims were payable. A smaller proportion of Medicare FFS improper payments are payments for claims CMS determined should not have been made or should have been made in a different amount (i.e. medical necessity, incorrect coding, and other errors), representing a known monetary loss to the program.
  • While the data shows an overall decrease in many of the 2017 improper payment rates when compared to 2015 and 2016, it is important to note that CMS and the MACs remain dedicated to continuously working to reduce improper payments. Of note, CMS works closely with all MACs to develop strategies to further reduce improper payments (e.g., MAC-specific Improper Payment Reduction Strategies).
  • All jurisdictions have varying claims volume and a different mix of provider types, which can significantly affect their respective Error Rate Contribution Scores. For example, in 2016 and 2017, JM had the largest Home Health/Hospice (HH/H) workload, which contributed to its having the greatest percentage of Medicare FFS improper payments of the four HH/H MACs, and ultimately a high Error Rate Contribution Score. Similarly, in 2016 and 2017, JC had the largest DME MAC workload, which contributed to its having the greatest percentage of Medicare FFS improper payments of the four DME MACs, and ultimately a higher Error Rate Contribution Score compared to the other DME MACs.
  • Likewise, a jurisdiction may have a high improper payment rate but have a lower percentage of Medicare FFS improper payments, resulting in a lower Error Rate Contribution Score. For example, in 2016, J15 had the highest improper payment rate of the HH/H MACs, yet only accounted for a small percentage of Medicare FFS improper payments. This resulted in a low Error Rate Contribution Score. It is important to note that CMS takes the Error Rate Contribution Score and its components (i.e., improper payment rate and percentage of Medicare FFS improper payments) seriously and uses data from the CERT program and other sources of information to address improper payments in Medicare FFS through various corrective actions and continues to work closely with the MACs in developing Improper Payment Reduction Strategies.
  • A main driver of the Medicare FFS improper payment rate for the past three years was improper payments for home health services. The home health improper payment rates for FY 2015 (report period July 1, 2013 – June 30, 2014), FY 2016 (report period July 1, 2014 – June 30, 2015) and FY 2017 (report period July 1, 2015 – June 30, 2016) were 59.0%, 42.0%, and 32.3%, respectively, largely due to insufficient documentation errors. CMS continues to implement corrective actions to address program payment vulnerabilities related to home health services. Home health corrective actions include: Probe and Educate reviews; a Pre-Claim Review Demonstration that was operational from August 2016 until March 2017; development of the Home Health Plan of Care/Certification and Progress Note Clinical Templates; and establishing a Home Health Recovery Audit Contractor. In addition, CMS policy revisions removing the physician face-to-face narrative requirement as part of the certification of Medicare home health eligibility are effective for home health episodes beginning on or after January 1, 2015 (Home Health Prospective Payment System 2015 final rule (CMS-1611-F, 79 FR 66031, November 6, 2014)).
  • DME MACs generally have high improper payment rates, but Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) claims represent a small share of total improper payments; thus the DME MACs have medium-to-low Improper Payment Rate Contribution Scores. The national DMEPOS improper payment rate of 44.6% ($3.7 B) in 2017 remains lower than the 73.8% ($7.2B) that was reported in 2010. This can be attributed to successes from corrective actions implemented over the past several years, including: a DMEPOS Accreditation Program; DME MAC onsite visits to large suppliers; DMEPOS competitive bidding; the establishment of a DME Recovery Audit Contractor; a prior authorization demonstration for Power Mobility Devices; and a national prior authorization program for certain DMEPOS items that are frequently subject to unnecessary utilization.
  • For additional information on the 2017 Medicare FFS improper payment rate estimate and on CMS’s corrective actions to reduce improper payments, please visit the HHS FY 2017 AFR at http://www.hhs.gov/afr.
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