Improper Medicare Payments

According to the CMS, improper Medicare payments collected from and repaid to health care providers amounted to $371.5 million. There was a need for ensuring accurate Medicare payments, people with Medicare would thus be ensured that they were being billed correctly.

The RAC demonstration program was created by the MMA act, 2003 with a view to find and correct improper Medicare payments. More than 1.2 bn Medicare claims are processed annually. There are a number of types of errors leading to incorrect payments.

CMS uses the RAC demonstration to assure that health care provider payments are accurate and proper. The error rate is calculated by Medicare as well. After the beginning of the RAC program the error rate dropped from 14.2 percent in 1996 yo 3.9 percent in 2007.

Just like the CERT program discovered, the improper payments identified by the RAC’s occured when claims were submitted by health care providers which did not comply with Medicare’s coverage or coding rules. Inpayment hospital were largely responsible for these kind of errors with 85 percent share of such errors.