$36.2 Billion in Improper Payments Means CMS Will Watch These Areas

CERT audit

A 90.5 percent accuracy rate for Medicare Fee-for-Service (FFS) payments may not sound too bad, but consider that the 9.5 percent improper payment rate adds up to $36.2 billion!

That’s the news from the 2017 Medicare Fee-for-Service Supplemental Improper Payment Data report based on Comprehensive Error Rate Testing (CERT). Smart move: Reviewing CERT results can help clue you in to the areas Medicare will scrutinize to ensure proper payment. You can use your investigation skills to pinpoint the services and specialty areas that apply to you so you can make improvements at your own healthcare organization.

Here Are The Error Rate Highlights

Fun fact: The FY 2017 Medicare FFS improper payment rate is based on claims submitted from July 2015 to June 2016 for practical reasons related to claims review and the approach to calculations.

Here’s how the error categories for improper payments broke down:

  • 64.1 percent insufficient documentation
  • 17.5 percent medical necessity
  • 13.1 percent incorrect coding
  • 3.6 percent other
  • 1.7 percent no documentation.

For Part B, the top 5 highest projected improper payments by dollar value were as follows:

  • Lab tests ($1,121,237,359)
  • Office visits, established ($832,300,002)
  • Hospital visit, subsequent ($830,470,464)
  • Hospital visit, initial ($765,933,412)
  • Other drugs ($744,482,041).

How Does Your Documentation and Coding Stack Up?

Insufficient documentation was a major error type for these services, especially lab tests (98.9 percent) and drugs (91.4 percent).

So if you code for those, be sure clinicians and coders are on the same page about documentation required (including orders) and that you have a good system in place for submitting documentation when it’s requested for review.

For the E/M services highlighted, insufficient documentation and incorrect coding were both major issues.

It’s not all doom and gloom, though. Table K2 in the CERT report shows that in 1999, the percent of lines in error for office visit E/M code 99214 was 56.6 percent. In 2017, the estimate was 7.6 percent. So keep up the good work on improving those rates!

Here are some tips to get you on your way:

  • Review when to report initial inpatient care (99221-99223) and subsequent (99231-99233), including the use of modifier AI (Principal physician of record).
  • Don’t overcompensate by downcoding. That counts in improper payments, too. And if it happens too often, auditors are going to want to look at your records to figure out why you’re choosing lower-paying codes so often. Office visit E/M codes are a top spot to watch.
  • Use the CERT report to your advantage. See if your specialty and the services you provide are highlighted in the report. Then hold educational sessions based around the improvements you need to make related CERT findings.

How About You?

What’s your view of CERT? Do the issues you see match up with what CERT results show are major issues?


Deborah works on a wide range of TCI SuperCoder projects, researching and writing about coding, as well as assisting with data updates and tool development for our online coding solutions. Since joining TCI in 2004, she’s covered the ins and outs of coding for radiology, cardiology, oncology and hematology, orthopedics, audiology, and more.

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