November 18, 2021

Mike Adelberg Discusses Historic Low in Improper Medicare Payments With Modern Healthcare

Modern Healthcare reported that, in 2021, the Medicare fee-for-service program issued $25 billion in improper payments, or 6.2% of all reimbursements, according to the Health and Human Services Department. In “Consolidation, prior authorization drive improper Medicare payments to historic low,” Faegre Drinker Consulting Principal Mike Adelberg addressed the significance of this rate, which was a decrease from $20.72 billion over the past seven years.

“A lot of improper payments are not the result of fraud; they are the result of insufficient documentation and codes that are the subject of disagreement between the provider and Centers for Medicare & Medicaid Services (CMS) contractors,” explained Adelberg. “Lower improper payment is good news, but it doesn’t automatically translate into less fraud and abuse.”

Regarding efforts to reduce inappropriate bills and improper payments, Adelberg noted that much of this work started about a decade ago after instances of overbilling for power scooters and other items caught regulators’ eyes. To combat unnecessary spending, regulators introduced prior-authorization requirements for certain services. These administrative tasks have been growing in recent years, he added.

The publication also reported that Medicare Advantage (MA) insurers accounted for $23.1 billion in improper payments. “It’s just really hard to ask them to slow down and document information about a condition that’s not really relevant for that point in time,” Adelberg said. “I think we’ll probably see documentation emerge as the single most challenging area for Medicare to fix.”

The full article is available for Modern Healthcare subscribers.

Meet the Authors

Photo of Michael S. Adelberg
Michael S. Adelberg

Principal - Healthcare Providers & Plans Practice Lead - Faegre Drinker Consulting

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