CMS eyes $370M goal in stemming improper payments

Monday - 3/5/2012, 8:46pm EST

Jon Blum, deputy administrator and director for the Center of Medicare, CMS

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The Centers for Medicare and Medicaid aim to recover as much as $370 million by stopping the flow of improper payments.

"Our main focus right now is to ensure that the payments that the Medicare program makes to private health plans are as accurate as possible," said Jon Blum, the deputy administrator and director for the Center of Medicare at CMS, in an interview on In Depth with Francis Rose.

Too often, he said, health plans submit codes denoting a particular diagnosis that "haven't been backed up by hard documentation," Blum said. That faulty code then results in an improper payment.

In order to remedy this, he added, CMS will begin auditing some plans "to ensure that their documentation can support their highest claims to the Medicare program."

First, CMS needs to identify the plans that will be subject to the new audits. Blum said the agency is targeting those plans that are the most "aggressive coders" — health plans that submit the most, or most expensive, diagnosis codes.

"Now, if those payments can be justified by clinical medical evidence, by physicians' records, then it's very much appropriate," Blum said. "But what we found is that for some plans, they're submitting diagnosis codes to us that can't be supported by the medical record."

The $370 million goal may only be a drop in the bucket in terms of the amount of money CMS typically pays out each year, but the agency thinks its approach will also be effective in sending health care providers a message.

"We think it's going to send very powerful signals, very powerful incentives," Blum said. "Plans do not want to be a part of these audit protocols, so we believe that it's going to create a very strong oversight relationship with our plans to reduce that error rate and to produce much more accurate payments."

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