Press Releases

HHS EMPLOYS NEW TOUGHER STANDARDS IN CALCULATION OF IMPROPER MEDICARE PAYMENT RATES FOR 2009
PART OF 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. These improvements will provide CMS with more complete information about errors so that 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,� said HHS Secretary Kathleen Sebelius. �From the very start of the Administration, the President has directed all the agencies across government to use honest budgeting and to take the hardest, most detailed look possible at what was happening with taxpayer dollars inside our agencies and inside critical programs. 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. �

The Medicare, Medicaid and Children�s Health Insurance Program (CHIP) improper payment rates are issued annually as part of the U.S. Department of Health and Human Services (HHS) Agency Financial Report.

While improper payment rates are not necessarily an indicator of fraud in Medicare or any other federal health care program, they do provide HHS, CMS, and its partners who are responsible for the oversight of Medicare and Medicaid funds a more complete assessment of how many errors need to be fixed.

�If we aren�t honest about the problem, there is no way we can get to a solution. Through a more stringent review of Medicare claims, we�ve been able to establish a more complete accounting of errors, enabling CMS to take more actionable steps to further reduce the error rate and identify abusive or potentially fraudulent actions before they become problems,� said Sebelius. �This change in calculating the error rate is just one part of our larger Administration-wide effort to reduce waste, fraud and abuse in health care. In addition to the establishment of HEAT, the joint task force that was established earlier this year with the Department of Justice, we�ve taken aggressive steps at HHS and CMS to improve our oversight of the Medicare trust funds and the taxpayer dollars that pay for the health care of millions of older and vulnerable Americans.�

�As we move forward in our review of the Medicare and Medicaid error rate data, we expect to be able to determine if there are specific trends that can better help us identify weaknesses in our programs or systems,� said Acting CMS Administrator Charlene Frizzera. �We hope to be able to use data available through the use of new electronic health record reporting that can help in the design of new and innovative approaches to finding emerging trends and vulnerabilities in high risk areas such as durable medical equipment and home health.�

Sebelius and Frizzera also pointed out the HHS and the CMS would invest more time and resources into working with providers to eliminate errors through increased and improved training and education outreach.

�It�s important that we continue to work closely with doctors, hospitals and other health care providers to make sure they understand and follow the more comprehensive fee-for-service requirements,� said Frizzera. �We are committed to working closely with them to reduce the rate of improper payments.�

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