Medicare Part D Improper Payment Measurement
The Centers for Medicare & Medicaid Services (CMS) uses a systematic plan to identify, measure, and report improper Medicare Part D payments each year. Since fiscal year (FY) 2008, CMS has submitted an annual Part D improper payment estimate and methodology to Congress in the Department of Health and Human Services (HHS) Agency Financial Report (AFR). This page highlights important details about the payment error rate and provides useful links and resources for further exploration, with accessible navigation options for all users.
Part D Payment Error Rates from FY 2016 – FY 2025
For FY 2025, CMS reported an improper payment measurement for the Part D program based on payments made during calendar year (CY) 2023. The Part D improper payment rate for CY 2023 is 4.00%, measured using an approved methodology that provides an accurate representation of the Medicare Part D population. Details of FY 2025 methodology changes are available in the supplemental report. The FY 2025 rate is statistically similar to the FY 2024 error rate. Table 1 presents results from the Part D Payment Error Estimates for FY 2016–FY 2025.
Table 1. Part D Payment Error Estimates (FY 2016 – FY 2025)
| Reporting Year1 | Payment Year | Gross Part D Error Rate2 | Gross Dollars in Error ($B) | Net Part D Error Rate3 | Net Dollars in Error ($B) |
|---|---|---|---|---|---|
| FY 2025 | 2023 | 4.00% | $3.70 | 3.01% | $3.18 |
| FY 20244 | 2022 | 3.70% | $3.58 | 2.62% | $2.53 |
| FY 2023 | 2021 | 3.72% | $3.35 | 1.46% | $1.32 |
| FY 2022 | 2020 | 1.54% | $1.36 | 1.45% | $1.29 |
| FY 2021 | 2019 | 1.33% | $1.15 | 0.98% | $0.85 |
| FY 2020 | 2018 | 1.15% | $0.93 | 0.93% | $0.75 |
| FY 2019 | 2017 | 0.75% | $0.61 | 0.08% | $0.06 |
| FY 2018 | 2016 | 1.66% | $1.32 | 0.06% | $0.04 |
| FY 2017 | 2015 | 1.67% | $1.30 | -0.51% | -$0.39 |
| FY 2016 | 2014 | 3.41% | $2.39 | 1.32% | $0.93 |
| 1Reporting reflects payment data from two years prior (e.g., FY 2025 data based on PY 2023 payments). 2Gross dollar error = sum of absolute underpayments and overpayments. 3Net dollar error = total overpayments minus total underpayments. 4For FY 2023, the Department of Health and Human Services (HHS) implemented several methodology changes, and FY 2024 established a new baseline. | |||||
The authority for CMS activities in Medicare Part D is outlined in the Payment Integrity Information Act of 2019 (PIIA) Public Law (116-117), signed March 2, 2020. PIIA revoked the Improper Payments Information Act (IPIA) of 2002 and its subsequent amendments. It also revoked the Fraud Reduction and Data Analytics Act (FRDAA) of 2015. PIIA incorporates relevant provisions from these acts into a single subchapter in the United States Code.