OIG Uncovers Flaws in CMS Processes, Programs

Approximately 5.5% of the CERT claim payment denials for FY 2009 and 7.6% for FY 2010 were overturned during one of the first three levels of the appeals process, but if these overturned CERT claim payment denials had been included in the initial error-rate calculations, the estimated value of reported errors for FYs 2009 and 2010 would have decreased by approximately $2 billion each year, according to the report.

In other words, the OIG report determined that the methodology used by CMS in calculating the error rate is flawed, which led to CMS overstating the amount of improper payments by approximately $2 billion in both 2009 and 2010. CMS failed to account for some providers’ successful appeals from denials issued by the CERT contractor, which led to the overstating.

Good news for providers
In an odd way, this is good news for providers in the sense that the OIG has publicly announced that the error rate is flawed, but unfortunately this information is unlikely to reach the audience that it should, according to Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc.

"In general, the public hears so much from the media about how providers have bilked the Medicare and Medicaid system out of billions of dollars," she says. "We rarely hear a follow-up story like this that shows that what was originally published is not accurate. A $4 billion error is a considerable overstatement by any account."