The reported error rate for Medicare Fee-for-Service in fiscal year 2015 was 12.09%, well above the compliance threshold of 10%, a new government report finds.

The Office of the Inspector General report specifically called out skilled nursing facility claims last week, noting the improper payment rate increased 4.1%.

“We recommend that HHS focus on the root causes for the improper error rate percentage and evaluate critical and feasible action steps to decrease the improper error rate percentage below 10%,” the OIG recommended in “Department of Health and Human Services Met Many Requirements of the Improper Payments Information Act of 2002 But Did Not Fully Comply for Fiscal Year 2015.”

The focus on a long-standing 10% threshold for improper payments shouldn’t have caught anyone by surprise, commented Kristin Walter, spokeswoman for the Council for Medicare Integrity.

“No one really talks about it. Now since the report is out it opens the opportunity to set this 10% threshold, which is reasonable,” she said. “The reality is not good and not acceptable.”

Despite provider concerns over Recovery Audit Contractors looking at too many claims, Walter said the Centers for Medicare & Medicaid Services recently changed the rule for document request to 0.5%.

“We’re not even scratching the surface,” she said.

Where providers are having the most problems is accuracy, she said. That was noted in the OIG report, which said HHS found the primary causes of improper payments were insufficient documentation and medical necessity errors.

“It’s basically things like coding errors: I did this work and I submitted the wrong code,” Walter said. “We’re not talking about fraud; we’re talking about waste and mistakes.”

When providers put steps in place to reduce billing mistakes, it puts them in a category of a low error billing rate, and the provider “will reap the benefits of fewer audits,” she said.

The OIG report also noted that HHS did not perform risk assessments of employee pay and charge card payments, and in addition criticized the lack of RAC activity for Medicare Advantage.

Click here to read the full report.