Medicare Part C Payment Error
High-Priority Program Improper
Payment Report
Centers for Medicare and Medicaid Services
Center for Medicare
Medicare Plan Payment Group
March 30, 2011

 Introduction
• The Improper Payments Information Act of 2002 (IPIA),
as amended by the Improper Payment Elimination and
Recovery Act of 2010 (IPERA), requires government
agencies to identify, report and reduce erroneous
payments in the government’s program and activities.
• Executive Order 13520 (EO) on Reducing Improper
Payment (issued November 20, 2009) also requires
government agencies to identify high-priority programs
in which the highest dollar value or majority of
Government-wide improper payments occur, and to
submit targets for reducing and recovering improper
payments.
Information Not Releasable to the Public Unless Authorized By Law: This information not been publicly disclosed an may be privileged and confidential. It is for internal government use
only and must not be disseminated, distributed or copied to persons not authorized to receive the authorization. Unauthorized disclosure may result in prosecution to the full extent of
the law.

1

 Table 1: FY 2009 and FY 2010 Reporting
Part C Composite Payment Error Estimate
Reporting Year

FY 20091

MARx Payment
Error (MPE) -

Risk Adjustment
Error (RAE)-

measures error
related to the MARx
payment system3

measures error in
risk adjustment data4

(b)(5)

FY 20102

Part C Composite5

15.4%
$11,971,619,277
14.1%
$13,551,311,955

1For

FY 2009 reporting, payment error estimates were based on CY 2007 payments.
For FY 2010 reporting, payment error estimates were based on CY 2008 payments.
(b)(5)
2

Information Not Releasable to the Public Unless Authorized By Law: This information not been publicly disclosed an may be privileged and confidential. It is for internal government use only and
must not be disseminated, distributed or copied to persons not authorized to receive the authorization. Unauthorized disclosure may result in prosecution to the full extent of the law.

2

 FY 2010 Part C Composite Measure
•

(b)(5)

Information Not Releasable to the Public Unless Authorized By Law: This information not been publicly disclosed an may be privileged and confidential. It is for internal government use
only and must not be disseminated, distributed or copied to persons not authorized to receive the authorization. Unauthorized disclosure may result in prosecution to the full extent of
the law.

3

 Part C Risk Adjusted Payments
• Part C Medicare Advantage (MA) Plans are paid a monthly
capitated amount for each enrollee.
• Payment takes into account the relative health status of each
enrollee.
• Health status and payment risk scores for each beneficiary are
established using diagnosis data from FFS claims and risk
adjustment data submitted by the MA plans.
• The CMS-HCC risk adjustment model, based on 70
Hierarchical Condition Categories (HCCs), is used to derive risk
scores.
• The model is additive and enrollees may have more than one
HCC.
• Plans have an incentive to submit more diagnoses.
Information Not Releasable to the Public Unless Authorized By Law: This information not been publicly disclosed an may be privileged and confidential. It is for internal government use
only and must not be disseminated, distributed or copied to persons not authorized to receive the authorization. Unauthorized disclosure may result in prosecution to the full extent of
the law.

4

 Risk Adjustment Error (RAE) Process
•
•
•

(b)(5)

•
•
•
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only and must not be disseminated, distributed or copied to persons not authorized to receive the authorization. Unauthorized disclosure may result in prosecution to the full extent of
the law.

5

 (b)(5)

•

(b)(5)

•

Information Not Releasable to the Public Unless Authorized By Law: This information not been publicly disclosed an may be privileged and confidential. It is for internal government use
only and must not be disseminated, distributed or copied to persons not authorized to receive the authorization. Unauthorized disclosure may result in prosecution to the full extent of
the law.

6

 (b)(5)

•

(b)(5)

•
•

Information Not Releasable to the Public Unless Authorized By Law: This information not been publicly disclosed an may be privileged and confidential. It is for internal government use
only and must not be disseminated, distributed or copied to persons not authorized to receive the authorization. Unauthorized disclosure may result in prosecution to the full extent of
the law.

7

 (b)(5)

Methodology for Calculating
•

(b)(5)

•

•

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It is for internal government use only and must not be disseminated, distributed or copied to persons not authorized to receive the authorization.
Unauthorized disclosure may result in prosecution to the full extent of the law.

8

 (b)(5)

•

(b)(5)

•

•
Information Not Releasable to the Public Unless Authorized By Law: This information not been publicly disclosed an may be privileged and
confidential. It is for internal government use only and must not be disseminated, distributed or copied to persons not authorized to receive the
authorization. Unauthorized disclosure may result in prosecution to the full extent of the law.

9

 Table 2.

(b)(5)

(b)(5)

(b)(5)

(b)(5)

Information Not Releasable to the Public Unless Authorized By Law: This information not been publicly disclosed an may be privileged and confidential. It is for internal government use only and must not be
disseminated, distributed or copied to persons not authorized to receive the authorization. Unauthorized disclosure may result in prosecution to the full extent of the law.

10

 (b)(5)

Table 3.

(b)(5)

Reporting Year
for Part C
Composite
Improper
Payment Rate

FY 2012 – FY 2014
(b)(5)

Reporting Year
for
(b)(5)

Payment Year

FY 2011

FY 2012

CY 2009

FY 2012

FY 2013

CY 2010

FY 2013

FY 2014

CY 2011

Part C Targets
as reported in
the FY 2010
AFR

(b)(5)

(b)(5)

Information Not Releasable to the Public Unless Authorized By Law: This information not been publicly disclosed an may be privileged and
confidential. It is for internal government use only and must not be disseminated, distributed or copied to persons not authorized to receive the
authorization. Unauthorized disclosure may result in prosecution to the full extent of the law.

11

 Corrective Action
•

(b)(5)

•

•
Information Not Releasable to the Public Unless Authorized By Law: This information not been publicly disclosed an may be privileged and
confidential. It is for internal government use only and must not be disseminated, distributed or copied to persons not authorized to receive
the authorization. Unauthorized disclosure may result in prosecution to the full extent of the law.

12

 Contract-Level RADV Audits
•

(b)(5)

•
•

•
•
Information Not Releasable to the Public Unless Authorized By Law: This information not been publicly disclosed an may
be privileged and confidential. It is for internal government use only and must not be disseminated, distributed or copied
to persons not authorized to receive the authorization. Unauthorized disclosure may result in prosecution to the full
extent of the law.

13

 Status of RADV Audits
• In December 2010, CMS requested public comment on
the RADV contract-level payment error calculation
methodology.
• CMS received over 500 comments.
– These comments express significant resistance to the
implementation of the RADV audits and payment recovery
based on extrapolated payment error estimates.
– Successful payment recovery based on payment error identified
in these RADV audits will depend on CMS’ ability to address the
challenges raised.

• CMS is expecting to respond to the comments and
finalize the payment error calculation methodology and
overall strategy shortly.
Information Not Releasable to the Public Unless Authorized By Law: This information not been publicly disclosed an may
be privileged and confidential. It is for internal government use only and must not be disseminated, distributed or copied
to persons not authorized to receive the authorization. Unauthorized disclosure may result in prosecution to the full
extent of the law.

14

 Release of
•

(b)(5)

(b)(5)

•

Information Not Releasable to the Public Unless Authorized By Law: This information not been publicly disclosed an may
be privileged and confidential. It is for internal government use only and must not be disseminated, distributed or copied
to persons not authorized to receive the authorization. Unauthorized disclosure may result in prosecution to the full
extent of the law.

15