Medicare's 2025 improper payment rate for Part B was 8.4%, but the rate runs from 0.0% to 30.4% depending on provider type. Internal medicine sits above the Part B average at 9.8%, while family practice is just under it at 7.6%.
The Centers for Medicare & Medicaid Services (CMS) publishes these rates every year in its supplemental improper payment data. The fiscal year 2025 report covers claims submitted from July 1, 2023 through June 30, 2024. This post uses the Part B tables, which cover the services billed by physician practices.
What CMS measured
CMS reviewed 11,600 Part B claims for the 2025 report. It projected $9,624,572,895 in improper payments, which is 8.4% of Part B payments. The 95% confidence interval runs from 7.6% to 9.3%. Part B accounts for 32.4% of all improper payments in Medicare fee-for-service, according to CMS Table I1.
The national rate across every Medicare fee-for-service claim type is 6.55%, so Part B runs about 1.9 points above it. An improper payment is a claim paid at the wrong amount, or paid without the records to support it. CMS states that fraud or other problems the review did not find could still be present, so the rate is an error measure and nothing more.
The sample is Medicare fee-for-service only. It says nothing about commercial payers or Medicare Advantage plans.
Rates for the specialties practices bill most
CMS lists each provider type in Table I1. The table below shows the groups that independent medical practices most often employ or compare themselves against. Each row shows the number of claims CMS reviewed, because a rate built on a small sample moves a lot.
| Provider type | Claims reviewed | Improper payment rate | 95% confidence interval | Projected improper payments |
|---|---|---|---|---|
| Internal Medicine | 866 | 9.8% | 7.5% to 12.1% | $773,434,434 |
| Cardiology | 379 | 8.7% | 5.8% to 11.5% | $321,213,865 |
| Family Practice | 509 | 7.6% | 4.3% to 11.0% | $416,972,278 |
| Nurse Practitioner | 835 | 7.2% | 5.3% to 9.2% | $476,720,264 |
| Orthopedic Surgery | 147 | 6.3% | 0.9% to 11.8% | $188,626,782 |
| Diagnostic Radiology | 564 | 5.8% | 3.3% to 8.3% | $260,830,181 |
| Dermatology | 202 | 3.4% | 0.9% to 5.8% | $103,438,232 |
| Physician Assistant | 304 | 3.2% | 0.8% to 5.5% | $168,069,844 |
| Ophthalmology | 507 | 3.2% | 0.2% to 6.3% | $253,124,779 |
| All Part B | 11,600 | 8.4% | 7.6% to 9.3% | $9,624,572,895 |
Source: CMS, 2025 Medicare Fee-for-Service Supplemental Improper Payment Data, Table I1. Rates are shares of Part B payments to that provider type.
Internal medicine has the largest projected dollar figure of any physician specialty in the table, at $773,434,434. That reflects volume as much as accuracy. It equals 2.6% of all Medicare fee-for-service improper payments.
The confidence intervals overlap for most specialties. Internal medicine at 9.8% and family practice at 7.6% cannot be separated with this sample, because the interval for family practice (4.3% to 11.0%) contains the internal medicine rate. Orthopedic surgery has the widest spread in the table, with an interval of 0.9% to 11.8% on 147 claims.
The same rate can have different causes
CMS also splits each provider type's improper payments by error type in Table J1. Across all of Part B, 58.4% of improper payments came from insufficient documentation, 18.8% from incorrect coding, 15.7% from no documentation, 5.5% from other errors, and 1.6% from medical necessity.
Specialties differ from that pattern. Family practice shows 68.1% insufficient documentation and 17.5% incorrect coding. Internal medicine shows 46.1% insufficient documentation, 32.9% incorrect coding and 16.0% no documentation. Nurse practitioners show 38.9% incorrect coding, which is double the Part B average of 18.8%.
| Provider type | No documentation | Insufficient documentation | Incorrect coding |
|---|---|---|---|
| Family Practice | 10.7% | 68.1% | 17.5% |
| Internal Medicine | 16.0% | 46.1% | 32.9% |
| Cardiology | 8.1% | 57.9% | 30.3% |
| Nurse Practitioner | 12.0% | 42.9% | 38.9% |
| Physician Assistant | 13.2% | 50.0% | 34.3% |
| All Part B | 15.7% | 58.4% | 18.8% |
Source: CMS, 2025 Medicare Fee-for-Service Supplemental Improper Payment Data, Table J1. Each row shows the share of that provider type's improper payments by error type. Rows do not sum to 100% because medical necessity and other errors are left out.
A documentation error and a coding error need different fixes. A practice with mostly documentation errors needs to look at note templates and records requests. A practice with mostly coding errors needs to look at how visit levels are assigned.
Established office visits, the highest-volume service
CMS reviewed 1,026 established office visit claims in the 2025 sample. The improper payment rate for that service was 5.3%, with a 95% confidence interval of 4.1% to 6.6%, and projected improper payments of $853,651,814.
By provider type, internal medicine had a 5.7% rate on 173 claims, nurse practitioners 4.1% on 126 claims, and physician assistants 6.0% on 57 claims. Family practice had the lowest rate in that table at 2.0% on 149 claims. Cardiology came in at 4.8% on 67 claims.
Orthopedic surgery shows a 14.1% rate for established visits, but CMS reviewed only 32 claims, and the interval runs from 1.1% to 27.1%. Dermatology (31 claims) and neurology (31 claims) have similarly thin samples. CMS also groups every provider type with fewer than 30 claims into one line, which shows 8.2% on 71 claims.
Internal medicine accounts for 18.3% of all improper dollars on established visits, the largest share of any provider type listed. Orthopedic surgery follows at 10.9% and nurse practitioners at 7.8%.
How a practice can use these rates
A practice cannot read its own risk from a specialty average, since the average mixes many billing patterns. It can still compare its own audit results against the Part B figures. An internal sample that finds more than 8.4% of Medicare claims paid wrongly or without support runs above the national Part B rate.
The error mix gives a second check. If a practice audit finds that most errors are missing or thin documentation, it matches the 58.4% Part B pattern. If most errors are coding, the practice resembles the nurse practitioner row at 38.9% or the internal medicine row at 32.9%.
Tracking the two error types separately each quarter shows which fix is working. A rate that falls from one quarter to the next because documentation errors dropped tells a different story from one that falls because coding errors dropped.
CMS drew these rates from claims with dates of service ending June 30, 2024, so they describe a period at least two years old by the time practices read them.
Sources
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