The error rate for Medicare claims declined in 2010 and is on track for a 50% reduction by 2012, according to the latest US Department of Health and Human Services (HHS) Agency Financial Report.

“Last year we changed how we calculate the error rate in fee-for-service Medicare to more accurately reflect improper payments and enhanced our efforts to fight waste, fraud, and abuse," said HHS Secretary Kathleen Sebelius. "This year’s lower rate reflects those changes and our focus on protecting Medicare.”

The Medicare fee-for-service error rate dropped to 10.5%, or $34.3 billion in estimated improper claims payments. The 2009 error rate was 12.4%, or $35.4 billion. Additionally, the Medicare Advantage, or Part C, error rate, based on payment year 2008, is 14.1%, or $13.6 billion, a reduction from last year’s rate of 15.4%, or $12.0 billion.