News: Reductions in improper payments due to directive CMS action, agency says

Improper hospital claims dropped from $10.45 billion to $4.42 billion from the 2014 report period (July 1, 2012 to June 30, 2013) to the 2016 report period (July 1, 2014 to June 30, 2015), according to a recent post on CMS Blog.

The agency attributes the decreases to policy decisions regarding inpatient versus outpatient care as well as to intensive probe audit reviews and educational efforts on documentation and billing practices.

Allowing hospitals to bill for Part B services in instances when inpatient admissions were deemed “not to be reasonable and necessary,” helped facilities rebill appropriately, wrote Shantanu Agrawal, MD, deputy administrator and director for Center for Program Integrity, and Jennifer Main, director and chief financial officer for Office of Financial Management, in the Blog post. 

Additionally, clarifications regarding the appropriateness of inpatient admissions established in October 2013 under the two-midnight rule “established benchmark criteria” for facilities. CMS then tasked its Medicare Administrative Contractors to conduct probe audits and offer one-on-one education to “discuss errors and encourage a change in future billing behavior.”

The agency expects to expand monitoring on what it calls “payment vulnerabilities” which “drive the improper payment rate” such as home health and inpatient rehabilitation claims “to more effectively target our provider education and medical review efforts.”