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Medicare Improper Payments Decline by $15 billion

​The Centers for Medicare and Medicaid Services (CMS) announced that the rate of Fee-For-Service (FFS) Medicare improper payments has continued to decline, resulting in an estimated $15 billion reduction in improper payments. CMS credits the reduction with recent efforts to identify the root causes of improper payments, implement action plans to reduce and prevent improper payments, and extend the CMS’s capacity to address emerging areas of risk through work groups and interagency collaborations.


The Medicare FFS estimated improper payment rate decreased to 6.27% in FY 2020, from 7.25% in FY 2019, the fourth consecutive year the Medicare FFS improper payment rate has been below the 10% threshold for compliance established in the Payment Integrity Information Act of 2019. CMS noted that the decrease in FY2020 is a result of improvements in home health and skilled nursing facilities (SNF). Home health improvements include clarifying documentation requirements and educating providers that resulted in an estimated $5.9 billion decrease in improper payments from FY2016 to FY2020. CMS implemented a policy change related to supporting information for physician certification and recertification for SNF services which is estimated to have reduced improper payments by $1 billion in the last year.

CMS continues to work on their five-pillar program integrity strategy to address improper payments. The five pillars include stopping bad actors, preventing fraud, mitigating emerging risks, reducing provider burden, and leveraging new technology.

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