Medicare Payment Errors and a Look Ahead

The 2018 Medicare Fee-for-Service (FFS) Improper Payment Report

The most recent Comprehensive Error Rate Testing (CERT) report outlines common payment errors for physicians and hospitals in 2018 as well as provides a roadmap for expected future payment errors.  Improper Medicare FFS payments in 2018 have been estimated in excess of $31 Billion which is more than 8% of the total payments made.

Overall, the payment errors are attributed to several categories.

Category Percent of Errors
Insufficient Documentation 58.0%
Medical Necessity 21.3%
Incorrect Coding 11.9%
Other 6.3%
No Documentation 2.6%

The report includes projections for future payment errors for hospitals and physicians and identifies specific DRGs and CPT codes associated with high payment error rates.  The report also highlights errors related to up-coding, missing orders, certifications, and diagnostic test results, as well as inconsistent medical record documentation.

Highest Improper Payments: Part A Hospital

Payment Rate
947, 948Signs & Symptoms32.00%
313Chest pain28.30%
515, 516, 517 Other Musculoskeletal System & Connective Tissue O.R. Procedure22.40%
312Syncope & Collapse17.80%
884Organic Disturbances & Mental
056, 057Degenerative Nervous System
266, 267Endovascular Cardiac Valve
100, 101Seizures12.90%
637, 638, 639Diabetes10.60%

Highest Improper Payments: Part B Evaluation & Management

CPT Description Improper Payment
99234 Observ/Hosp Same Date 65.6%
99490 Chronic Care Management 63.5%
99220 Initial Observation 40.2%
99306 Nursing Facility Care, Initial 36.5%
99292 Critical Care, Each addl 30 min 35.7%
99212 Office Outpatient Visit 30.6%
99310 Nursing Facility Care, Subsequent 30.0%
99211 Office Outpatient Visit 29.3%
99223 Initial Hospital Care 27.2%
99231 Subsequent Hospital Care 21.6%

Accurate and timely identification of provider and organizational risks is a critical component of any effective compliance program.  We recommend you review the complete CERT report and conduct proactive auditing and monitoring of known risks that are applicable to your organization.  The HBE team is available to provide you with assistance to identify your risk areas and conduct auditing and provider education as needed.

The complete CERT report can be located at

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