Medicare Part C Improper Payment Measurement (IPM)

Medicare Part C Improper Payment Measure 

The Centers for Medicare & Medicaid Services (CMS) annually identifies, measures, and reports erroneous Medicare Part C payments. Since fiscal year (FY) 2008, CMS has submitted an annual Part C 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 C Payment Error Rates from FY 2016 – FY 2022

For FY 2022, CMS reported an Improper Payment Measurement (IPM) for the Part C program based on payment year 2020 (PY 2020).  The PY 2020 Part C IPM payment error rate of 5.42% is not comparable to prior years because of policy changes implemented within the FY 2022 error rate calculation methodology. The FY 2022 reporting year is a new baseline and should not be compared with prior reporting years. Table 1 presents results from the Part C Payment Error Estimates for FY 2016 – FY 2022.

Table 1:  Part C 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 values of the underpayments and overpayments (including overpayments due to missing or insufficient documentation).}                                                                                                                                  

^{3 Net payment error is the difference between total overpayments (including overpayments due to missing or insufficient documentation) and the absolute value of the total underpayments.}

The authority for CMS activities in Medicare Part C 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 four acts into a single subchapter in the United States Code.