A recent report from the Office of Inspector General (pdf) found that if overturned payment denials from CMS' Comprehensive Error Rate Testing program were included in its initial error-rate calculations, the estimated value of reported errors in fiscal years 2009 and 2010 would have decreased by $2 billion each year.
Hospitals and healthcare providers can appeal claim payment denials made by CERT contractors, and most are overturned in the first three levels: the Medicare Administrative contractor stage, the Qualified Independent Contractor stage and the Administrative Law Judge stage. When CMS submits a report to Congress on the amount of improper payments for Medicare claims, the estimates do not reflect all errors that are overturned during the appeals process and could, therefore, overstate the actual impact of improper payments.
In FY 2009, the Medicare error rate was 7.8 percent (totaling $24.1 billion), and in FY 2010, the error rate was 10.5 percent (totaling $34.3 billion). The OIG looked at CERT claim payment denials that were fully or partially overturned during one of the first three levels of the appeals process — and also after the cutoff dates for determining the error rates that are not included in CMS' annual report.
The OIG found that CERT claim payment denials overturned after the cutoff date would have reduced the reported error rates from 7.8 percent to 7.2 percent for FY 2009 and from 10.5 percent to 9.9 percent for FY 2010. This would have decreased the estimated value of reported errors by approximately $2 billion each year.
The OIG recommended that CMS develop a more reliable method for adjusting the Medicare error rate and that CMS include the outcomes of appealed and overturned decisions of CERT claim payment denials "to make CMS' estimate of the value of reported errors more accurate."
Hospitals and healthcare providers can appeal claim payment denials made by CERT contractors, and most are overturned in the first three levels: the Medicare Administrative contractor stage, the Qualified Independent Contractor stage and the Administrative Law Judge stage. When CMS submits a report to Congress on the amount of improper payments for Medicare claims, the estimates do not reflect all errors that are overturned during the appeals process and could, therefore, overstate the actual impact of improper payments.
In FY 2009, the Medicare error rate was 7.8 percent (totaling $24.1 billion), and in FY 2010, the error rate was 10.5 percent (totaling $34.3 billion). The OIG looked at CERT claim payment denials that were fully or partially overturned during one of the first three levels of the appeals process — and also after the cutoff dates for determining the error rates that are not included in CMS' annual report.
The OIG found that CERT claim payment denials overturned after the cutoff date would have reduced the reported error rates from 7.8 percent to 7.2 percent for FY 2009 and from 10.5 percent to 9.9 percent for FY 2010. This would have decreased the estimated value of reported errors by approximately $2 billion each year.
The OIG recommended that CMS develop a more reliable method for adjusting the Medicare error rate and that CMS include the outcomes of appealed and overturned decisions of CERT claim payment denials "to make CMS' estimate of the value of reported errors more accurate."
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