A Medicare initiative to better calculate fee-for-service payment error rates will result in new billing procedures for hospitals. The program also is reporting a much higher error rate than in past years.

The Centers for Medicare and Medicaid services has revamped how it reviews Medicare claims for inpatient hospital services and has eliminated the use of past billing records as part of a complex medical review. The result of heightened scrutiny and a more complete accounting of fee-for-service claims is that Medicare's 2009 FFS error rate was 7.8%, compared with 3.6% in 2008, according to CMS. Consequently, the agency is taking a number of steps to ensure:

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