CMS publishes FY 2025 improper payment figures

CMS recently published a fact sheet detailing improper payments across Medicare and Medicaid programs in fiscal year (FY) 2025, including overpayments, underpayments, and payments that lacked sufficient documentation.

The estimated fee-for-service improper payment rate was 6.55% ($28.83 billion) in FY 2025, signaling a decrease from the FY 2024 reported rate of 7.66% ($31.70 billion). CMS noted that the FY 2025 rate marks the ninth consecutive year that the figure has fallen below the 10% compliance threshold.

The estimated FY 2025 Part C improper payment rate was 6.09% ($23.67 billion), slightly higher than the reported rate of 5.61% ($19.07 billion) in the previous year. CMS attributed most of these improper payments to situations where Medicare Advantage Organizations failed to submit documentation that substantiated the diagnoses submitted for payment. For Part D, the estimated improper payment was 4.00% ($4.23 billion), a slight increase from the FY 2024 reported rate of 3.70% ($3.58 billion).

Revenue cycle professionals can find more information on CMS’ Improper Payments Measurement Programs here.