In this era of reducing improper healthcare payments, providers obviously are gearing up for some major league defense against the RACs, ZPIC, MICs and other governmental auditing bodies by shoring up their coding and billing practices. But there also have been some recent developments on the other side of the audit desk in the form of several critical federal initiatives.

With the release of fiscal year 2009 improper payment data by the Office of Management and Budget (OMB), a report on how the federal government calculates its error rates in an attempt to better target improper payments, then finally an executive order from President Obama on eliminating waste in federal programs, it was a busy week for our federal government.

• On Nov. 17, the Office of Management and Budget (OMB) released data on improper payments made by the federal government in the 2009 fiscal year. The data revealed $98 billion in improper payments made during that time - with more than half that amount ($54.2 billion) coming from the Medicare and Medicaid programs - and showed that the rate of Medicare fee-for-service errors more than doubled over the previous year, according to White House budget chief Peter Orszag. The report shows that the Medicare fee-for-service (FFS) program had $24 billion in improper payments during FY 2009, with an improper payment rate of 7.8 percent, compared to a FY 2008 rate of 3.6 percent. The OMB attributed the error rate increase to stricter standards on identifying improper payments, and not necessarily a higher volume of improper payments on the part of providers.
  
  Orszag stated that the increase reflects methodological changes in the way errors are counted in Medicare fee-for-service. For example, he said, an illegible signature on a claim or insufficient documentation provided to auditors now are more likely to be classified as errors. The changes came in response to recommendations made by HHS's Inspector General's Office, which found that the rates the CMS had been reporting actually were underestimating the problem.
  
  Orszag did not say what percentage of the errors constituted fraud, but in a late evening press call held Nov. 17, he noted that some of the errors were misdirected payments occurring due to a physician's illegible signature or inadequate documentation. In any case, he stated, "we can no longer tolerate these errors, mistakes and misdeeds ... every dollar misspent is a dollar not going to help an unemployed worker, a family in need of help buying groceries or a senior who relies on Medicare to stay healthy."
  
  
  
  
• On Nov. 18, the CMS Office of Public Affairs issued a press release on how the federal government will employ tougher new standards in the calculation of 2009 improper payment rates as a part of the administration-wide strategy to eliminate errors and prevent waste and fraud. "As part of the Obama Administration's goal of reducing waste, fraud and abuse in Medicare, the Department of Health and Human Services and the Centers for Medicare & Medicaid Services (CMS) significantly revised and improved its calculations of Medicare fee-for-service (FFS) error rates in 2009, reflecting a more complete accounting of Medicare's improper payments than in past years," the release stated. The release also states that these improvements will provide CMS with more complete information about errors so the agency can better target improper payments. "The Obama Administration is committed to strengthening and improving the Medicare and Medicaid systems and doing everything we can to be responsible and vigilant stewards of these programs that millions of Americans rely upon," HHS Secretary Kathleen Sebelius said. "This year, we made the call to stop calculating our error rate in fee-for-service Medicare the way that the previous Administration did and to start using a more rigorous method in calculating this rate in keeping with our mandate to root out errors and fraud."
  
  
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