The improper payment error rate is determined by methodology specified in the IOM, Publication 100-08 – Medicare Program Integrity Manual, Chapter 3 – Verifying Potential Errors and Taking Corrective Actions, Section 3.7.1.1 – Provider Error Rate.

For post-pay probes, the improper payment calculation is as follows: the dollar amount of the services paid in error as determined by medical review is divided by the dollar amount of the services originally paid for the services under review.

For pre-pay probes, the improper payment calculation is as follows: the dollar amount of the services billed in error as determined by medical review is divided by the dollar amount of the services originally billed for the services under review.