Corporate Compliance

CMS to increase oversight of contractors' payment error rates

Compliance Monitor, December 16, 2004

In a move to reduce improper payments, CMS said December 13 it will launch new steps to measure contractor error rates in Medicare payments.

"We have made significant strides in how we measure the error rate in Medicare payments, and that will enable us to do even more to bring it down," said CMS Administrator Mark B. McClellan, MD, PhD, in a CMS press release. "We have much better data that will help us pinpoint problems and allow us to work with the Medicare contractors and providers to make sure claims are submitted and paid properly."

The net national error rate for fiscal year 2004 was 9.3%. CMS seeks to reduce the error rate by more than half to 4% in four years by building on recent reforms in payment oversight and new authorities in the Medicare law.

Contractors will officially be required to do the following:

(1) Develop corrective action plans that include efforts to educate providers about the importance of submitting thorough and complete medical records

(2) Identify where additional review of claims and education on submitting claims is needed, based on information that shows where the highest percentage of errors on overused billing codes are occurring

(3) Use the performance results to develop local efforts to lower their error rates by addressing the cause of the errors and outlining corrective steps.

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