A Decline of $15 Billion in Medicare Fee-For-Service Improper Payments

Both patients and physicians are in for a treat. A few days ago, CMS happily announced the continued decline in the Medicare Fee-For-Service improper payment rate.

It is a clear statement in the name of transparency. More importantly, it is the proper accreditation of taxpayer money and an effort to strengthen the Medicare program in general. Undeniably, such are the efforts that pave the way for a rewarding healthcare system.

If you see it in another manner, once you hold fraudulent activities to account, there is more to give to those who deserve it. It automatically translates into value for quality programs like the MIPS 2020 and for other value-based care programs. Through such strategic actions, we will cement the positive reflection of value-based programs, both materially and conceptually.

In fact, once CMS saves taxpayer money by stopping improper payments made on account of frauds, overpayments, and underpayments, it converts into quality care and fewer expenses for the common man.

Four Years of Remaining on Point Saves the Day

It was not an overnight thing, but it took four constant years to come to this point. CMS corrective measures led to an estimated $15 billion reduction in Medicare FFS improper payments in FY 2020. It was part of the agency’s action plans that helped reduce and prevent illegitimate payments over the years.

During this journey of consistency and hard work, the agency’s capacity to address risks improved substantially through group activities and interagency collaborations.

For a fact, it was the Trump administration that made a clear commitment to protect Medicare for our seniors. To achieve this purpose, we must ensure that frauds, abuse, and waste do not happen as they will rob the program of its efficacy, Ms. Seema Verma expressed in her brief talk.

The Trump administration doubled the efforts to protect taxpayer money, and this year’s continued reduction in Medicare FFS improper payments is a direct effect of those actions.

Historic Win for Taxpayers

The reduction in improper payment rate means a win for taxpayers. Their hard-earned money is safer this year by quite a margin from the previous year. Due to the constant efforts in this sector, in 2020, CMS managed to decrease the improper payment rate further down – to 6.27%. Back in FY 2019, this rate was 7.25%. It is the start of an era of taxpayer savings to ignite the flames of a flawless healthcare system.

The improper payment rate threshold has to be under 10%, and, rightly so, we live to see it become a reality. In the past four years, we made this progress under the Payment Integrity Information Act of 2019 for our present and future generations.

Progressive Areas

Home Health department saw improvements, including clarifying documentation requirements and raising awareness among providers through the Targeted Probe and Education program. The resulting situation was no less than incredible. It led to a $5.9 billion decrease in improper payments from 2016 to 2020.
Skilled Nursing Facility Claims was the other area that saw improvement. There was an approximate reduction of $1 billion in improper payments in the last year due to a policy shift. It happened due to an adjustment made to the supporting information for physician certification and recertification of the skilled nursing facility services. Moreover, CMS’ Targeted Probe and Educate programs reaped its fruits.

Healthcare costs are soaring as we speak, and they are going to increase going forward. According to an estimate, by 2026, one out of every five tax dollars will go into healthcare.

To have sustainable cost growth, CMS must continue to strive for a system that accepts only proper payments. Improper payments only destabilize the cost balance. Stating the obvious, they are illegal payments – intentional or otherwise – going against the sustainability of affordable healthcare. They also represent false spending of American taxpayer dollars; however, not all of them represent fraud. The definition of improper payments includes overpayments, underpayments, or payments made under insufficient information.

Action Plan

CMS has developed a five-tier program integrity plan to mark the agency’s approach to reducing improper payments while safeguarding its programs for future generations:

Bring Bad Actors to Justice: CMS works alongside law enforcement agencies to bring people who have defrauded the system under law.
Prevent Fraud Before It Happens: Rather than the costly and ineffective “pay & chase” model, CMS eliminates fraud proactively by reducing the opportunities to exploit vulnerabilities in healthcare.
Mitigate Risks to Value-Based Programs: CMS continues to explore ways to identify and reduce integrity risks to value-based care programs. MIPS 2020 and Advanced Alternative Payment Models (APMs) are the two programs currently underway. With the help of experts in the healthcare community, their lessons learned, CMS pledges to run these programs smoothly.
Reduce Provider Burden: It is in line with reducing providers’ burdens who make claim errors in good faith; CMS wants to assist them by giving them easier access to coverage and payment rules. In addition to that, CMS is educating them on compliance programs. P3 Healthcare Solutions becomes a part of this effort via MIPS data submission to CMS as a MIPS Qualified Registry.
Leverage Artificial Intelligence and Machine Learning: CMS looks to leverage technology like AI and machine learning to allow the Medicare program to oversee compliance on claim submissions. It eventually calms the providers down, and taxpayers get to pay less.