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 provides useful links and resources to learn more.

Part D Payment Error Rates from FY 2016 – FY 2022

The Gross Part D Payment Error Rate steadily declined from 3.41% in FY 2016 to 0.75% in FY 2019, however increased from 1.15% in FY 2020 to 1.33% in FY 2021 and most recently to 1.54% in FY 2022.  None of the annual increases since 2019 have been statistically significant.  The increase from the prior year's estimate of 0.21% is due to year-over-year variability.  As the rate is already low, variation in sampled error values or error category breakouts can cause minor shifts in the total estimated error rate.

Table 1:  Presents results from the Part D Payment Error Estimates for FY 2016 – FY 2022

Table 1.  Part D Payment Error Estimates for FY 2016 – FY 2022

^{1 The reporting year reports on payment year data from two years prior (e.g., FY 2022 error estimate is based on PY 2020 payments).}                                                                        

^{2 Gross payment error is calculated by taking the sum of the absolute underpayments and overpayments.}                                                                                                                                      

^{3 Net payment error is the difference between total overpayments and total absolute underpayments.}