PaymentAccuracy.gov

All payment error rate calculations for the Medicaid program are based on the ratio of estimated dollars of improper payments to the estimated dollars of total payments. Individual state error rate components are combined to calculate national component error rates, and individual state Medicaid program error rates across all components are combined to calculate the national Medicaid program error rate.

In the FY 2012 AFR, HHS calculated and is reporting the three-year weighted average national error rate that includes data from FYs 2010, 2011, and 2012. The three-year rolling error rate is 7.1 percent or $19.2 billion. The weighted national error components rates are as follows: Medicaid FFS: 3.0 percent; Medicaid managed care: 0.3 percent; and Medicaid eligibility: 4.9 percent.

The majority of the FY 2012 errors were a result of cases reviewed for eligibility that were either not eligible or their eligibility status could not be determined, thus they were considered errors.  The most common cause of cases in error for the Medicaid FFS medical review was insufficient documentation.

Many states are taking steps to reduce errors identified during the measurement, including enhanced education for program providers to ensure proper documentation is submitted timely and in accordance with error measurement requirements, leveraging technology and available databases to obtain eligibility verification information without client contact, and providing additional caseworker training.  Each state is expected to take corrective actions to reduce the most common causes of improper payments.  HHS monitors states’ implemented corrective actions to determine whether the actions are effective and whether milestones are being reached.  HHS is contributing significantly to this effort through the development of provider educational toolkits which stress the need for full and complete documentation, and through targeted provider education in certain high risk areas. Additional information on the program is also provided annually in the Department’s Agency Financial Report.