CMS Says First Improper Payment Rate For FFE Program Below 1%

CMS is on a mission to ensure all its programs are fiscally responsible.

CMS says the first improper payment rate for the federally-facilitated exchange program was less than 1% for the 2020 benefit year, which the agency credits to the automated process it utilizes to determine eligibility for the program.

"Protecting our programs' sustainability is one of CMS' core strategic pillars. We are focused on program integrity so that people today—and in the future—continue to benefit from access to quality care," CMS Administrator Chiquita Brooks-LaSure, said in an email release. "This low rate of improper payments in the Federally-facilitated Exchange is a testament to the effectiveness of our efforts to ensure program integrity, furthering the Biden-Harris Administration’s goal of maintaining the long-term sustainability of CMS' programs. We are committed to strengthening and maintaining these efforts to bring down improper payment rates across the board."

CMS defines improper payments as payments that do not meet program requirements, including overpayments, underpayments, lack of sufficient payment information, and fraud. CMS notes that the "vast majority" of improper payments are not fraud.

CMS says improper payment rates in Medicaid and the Children’s Health Insurance Program (CHIP) showed significant declines in 2022 from 2021. The 2022 Medicaid improper payment rate was 15.62%, a decrease from the 2021 reported rate of 21.69%. CMS says that of the 2022 Medicaid improper payments, 86.82% were the result of insufficient documentation. These situations occurred when a state or provider missed an administrative step; there were no indications of fraud or abuse. For CHIP, the 2022 improper payment rate was 26.75%, a decrease from the 2021 rate of 31.84%. Of the 2022 CHIP improper payments, 76.05% were the result of insufficient documentation, not fraud or abuse.