March 2, 2011

New Standards Improve Payment Error Rates

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wiitalaRA February announcement by the Centers for Medicare & Medicaid Services indicates that it is going the extra mile to increase the accuracy of the data collected by comprehensive error rate testing (CERT) program contractors. Specifically, CMS staff will make follow-up calls to providers to obtain all necessary medical record documentation for claims reviewed under the CERT program. The CMS staff calls go above and beyond the calls and letters that providers receive from CERT contractors.

In its memo, CMS stated that these additional efforts may change a claim's status from improper to proper payment. At the least, the added information will allow the agency to "calculate a more accurate Medicare FFS [fee for service] error rate" and reduce the amount of improper payments. As providers know by now, these two goals are the exact reasons for the CERT program.

Going back a few months, to a November 16, 2010, press release, CMS credits the "new standards" that it implemented in 2009 as helping to lower Medicare FFS improper payment rates in 2010.(1) CMS now holds review contractors to a strict adherence to Medicare policy and documentation requirements. These include signature legibility(2), removal of claims history as a valid source for review information, and the determination that medical record documentation received only from a supplier is, by definition, insufficient to substantiate a claim.

As CMS says, "Following the Obama Administration's work to more accurately account for improper payments and a renewed focus on fighting waste, fraud and abuse, the 2010 error rate for Medicare claims declined ... and is on track for a 50 percent reduction by 2012, or a reduction of 6.2%."

Specifically, in 2010, the Medicare FFS error rate dropped to 10.5 percent (or $34.3 billion in estimated improper claims payments). The 2009 error rate was 12.4 percent or $35.4 billion. The primary causes of errors that were found for 2010 were insufficient documentation and medically unnecessary services.

The CERT program follow-up calls by CMS staff to providers show that the federal government agencies are continuing to invest time and resources to work with providers across the country and eliminate errors through increased and improved training and education outreach. CMS says that it is "enhancing its efforts to educate and inform doctors, hospitals and other health care providers about the comprehensive requirements to help lower the number of errors and improper payments, not only across Medicare, but also in Medicaid, CHIP, Medicare Advantage Part C, Medicare Part D prescription drug coverage."

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(1) See Transmittal 327 at http://www.cms.gov/transmittals/downloads/R327PI.pdf for more on signature requirements for medical review purposes.

(2) The Medicare and Medicaid improper payment rates are issued annually as part of the U.S. Department of Health and Human Services (HHS) Agency Financial Report.)

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About the Author

Randy Wiitala, BS, MT (ASCP) is a senior healthcare consultant with Medical Learning, Inc. (MedLearn), St. Paul, MN. MedLearn is a nationally recognized expert in healthcare compliance and reimbursement. Founded in 1991, MedLearn delivers actionable answers that will equip healthcare organizations with their coding, chargemaster, reimbursement management and RAC solutions.

Contact the Author

rwiitala@medlearn.com

Randy Wiitala, BS, MT (ASCP)

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