CMS Looks at Over and Underpayments

By Featured article

Each year, the Centers for Medicare & Medicaid Services (CMS) calculates the Medicare Fee-for-Service (FFS) improper payment rate through a program called Comprehensive Error Rate Testing (CERT). Because of this program, CMS has been able to decrease its error rate.1

Using a statistically valid stratified random sample of claims, CMS determines if Medicare payments were paid properly under coverage, coding and billing rules. This program does not look at fraudulent activity as the sample is random.

Improper payments in 2017 were attributed to insufficient documentation (64% of claims), lack of medical necessity (17%), incorrect coding (10%), no documentation (2%) and other (3%). Underpayments on claims were attributed to approximately three percent of the claims.

The top root causes for insufficient documentation errors in Part B were attributed to the failure to submit the following:

  • Documentation to support medical necessity
  • Valid provider’s order or element of an order

  • Valid provider’s intent to order (for certain services)
  • Documentation of result of the diagnostic or laboratory test
  • Documentation to support the services were provided or were provided as billed
  • A signature log of medical personnel to support a clear identity of an illegible signature or the provider’s written attestation of the unsigned or illegible signature

Practices should create a formal process to review provider documentation to ensure that the diagnosis and plan of care supports the treatment plan for the patient.

For practices looking to stay up to date on the different programs of CMS, compliance-related materials and quarterly compliance newsletters are available for download here. 

This information was taken from the InfoDive Coding and Audits webinar held in November 2018.