CMS Touts $1B Decline in Improper Skilled Nursing Payments in 2018

The federal government slashed improper payments to skilled nursing facilities by a little more than $1 billion in fiscal 2018, but regulators aren’t declaring victory yet.

The Centers for Medicare & Medicaid Services (CMS) on Friday reported a Medicare fee-for-service improper payment rate of 6.55% in fiscal 2018 for SNFs, down from 9.33% during the previous fiscal year. Across all settings, that figure dropped from 9.51% to 8.12% over that span, remaining below the legally mandated threshold of 10% for the second straight year — and netting the government $4.59 billion in savings.


The “significant progress” represents the lowest proportion of improper payments since 2010, according to CMS, buoyed by an increased focus on determining eligibility for specific cases before facilities provide the associated services.

“Our accomplishments over the past year were the result of a focused effort to target root causes of improper payments,” CMS administrator Seema Verma wrote in a statement announcing the results. “CMS also implemented a targeted review strategy that focused on provider education, assistance, and burden reduction.”

The government’s definition of improper payments includes fraud, as well as all other outlays that didn’t meet CMS’s requirements; those errors can include both over- and under-payments, Verma noted.


Still, Verma emphasized that CMS isn’t done rooting out erroneous Medicare fee-for-service claims, noting that one out of every five taxpayer dollars is spent on health care. Going forward, the agency plans to focus on streamlining the electronic authorization process, as well as expanding the use of prior authorizations in its durable medical equipment reimbursement process.

“While we have made progress on reducing the improper payments rate, we are not satisfied and more work needs to be done to achieve increased and consistent reductions in the future by implementing already existing initiatives as well as innovative processes, Verma wrote. “CMS’s program integrity initiative relies on a multifaceted approach that includes provider enrollment and screening standards, enforcement authorities, and advanced data analytics such as predictive modeling.”

Written by Alex Spanko

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