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CMS made $36B in improper payments in FY2017 — 6 key notes

The 2017 Comprehensive Error Rate Testing report shows CMS spent an estimated $36 billion last year on payments that should not have occurred, payments made in an incorrect amount or payments for which there were errors in documentation. Improper payments include payments to ineligible recipients, payments for ineligible services or services not received and duplicate payments. Here are six key notes.

1. The Medicare FFS program improper payment rate decreased from fiscal year 2016 to fiscal year 2017, from 11 percent to 9.51 percent.

2. An improper payment rate of 9.51 percent means that out of $380.8 billion in total payments, $36.2 billion was paid in error in fiscal year 2017.

3. "Insufficient documentation" accounted for 64.1 percent of the improper payments and was the leading cause of improper payments, translating to $23.2 billion in erroneous payments. When payments lack sufficient documentation, HHS cannot determine the accuracy of the payment made.

4. CMS underpaid on claims by $1 billion in fiscal year 2017.

5. The improper payment rate for Part A providers, excluding Hospital Inpatient Prospective Payment System, was 11.31 percent — a total of $18.24 billion. The rate for Part B providers was slightly lower at 10.16 percent, adding up to $9.85 billion.

6. HHS sampled about 50,000 claims during the fiscal year 2017 report period to project the number of improper payments made.

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