Health and Human Services Toughens Standards for 2009 Fee-for-Service Error Rate Calculations

The Medicare fee-for-service (FFS) rates for 2009 have been significantly revised to more accurately capture improper payments, according to a Nov. 18, 2009, announcement by the U.S. Department of Health and Human Services and the Centers for Medicare & Medicaid Services (CMS).

“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,” said HHS Secretary Kathleen Sebelius.

The Medicare, Medicaid and Children’s Health Insurance Program (CHIP) improper payment rates were issued as part of the HHS annual Agency Financial Report.

“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.”

The agency is reviewing the error rate data for specific trends that can help identify weaknesses in the programs or systems.

“We hope to be able to use the data available through the use of new electronic health record reporting…to help design new and innovative approaches to finding emerging trends and vulnerabilities in high risk areas such as durable medical equipment and home health,” said Charlene Frizzera, acting CMS administrator.

More information on the calculation can be found at www.cms.hhs.gov.