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Medicaid Error Rate Low
December 27, 2010

Results of a 2009 Centers for Medicare and Medicaid Services audit of the Pennsylvania Medicaid Program indicate an error rate that is less than half of the national average. Medicaid, or Medical Assistance, funds are used by more than two million Pennsylvanians. The error rate for Pennsylvania was 4.07 percent compared to the national average of 8.98 percent. According to the report, the Department of Public Welfare (DPW) saved almost $690 million in fiscal year 2009/10, including $614 million in costs that were avoided or recovered from third parties and $75 million saved through fraud and abuse detection and other monitoring efforts. A standardized Payment Error Rate Measurement (PERM) is used nationwide to calculate the level of error, which can range from clerical errors through improper payment for services that were not medically necessary. The report breaks out error rates in three areas: Fee-for-Service (3.77 percent), Medicaid eligibility (1.97 percent), and payment to managed care organizations (0.19 percent). Pennsylvania’s Fee-for-Service error rate has decreased since 2006 when it was measured at 5.21 percent. The report indicated that many errors resulted from insufficient documentation or inability to obtain sufficient information from Medicaid recipients. DPW continues efforts to reduce errors through audit, data analysis, and third-party liability review. The report is available from the link.

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