CMS’ Predictive Analytics System Prevented $210M in Fraud

June 26, 2014 in News

On Wednesday, the Obama administration  announced that CMS’ Fraud Prevention System saved the agency more than $210 million by stopping improper Medicare reimbursements in fiscal year 2013, according to a CMS report to Congress, the Washington Times reports.

Details of Fraud Prevention System

The anti-fraud system has been in use for two years and is part of a larger anti-fraud strategy that has resulted in $19.2 billion in fraud recoveries during the past five years, according to CMS (Howell, Washington Times, 6/25).

The program uses predictive analytics to examine billing patterns against every Medicare fee-for-service claim. It also uses data sources such as compromised Medicare identification numbers and complaints made through the Medicare hotline (CMS release, 6/25).

According to the report, the system doubled the improper payments recovered or prevented by CMS this year and prompted the agency to take action against 938 health providers and suppliers.

Reaction to Report

CMS Administrator Marilyn Tavenner said the agency is “using the best of private-sector technology to move beyond the ‘pay-and-chase’ approach to protect the Medicare Trust Funds.” She added, while CMS is continuing to enhance the Fraud Prevention System, “we have demonstrated that investing in cutting-edge technology pays off for taxpayers and Medicare beneficiaries.”

However, some lawmakers are “not so satisfied with the results,” The Hill reports. Specifically, Rep. Tim Murphy (R-Pa.) said, “Last year, CMS estimated that improper payments were almost $50 billion … This is a shocking amount of taxpayer money to lose every year” (Viebeck, The Hill, 6/25).

CMS Probes Electronic Medicare Cards

In related news, CMS during a House Energy and Commerce Subcommittee on Oversight and Investigations panel discussion on Wednesday said it needs more funding before it can remove Medicare beneficiaries’ Social Security numbers from their Medicare cards, The Hill reports.

Shantanu Agrawal, the new deputy administrator at CMS’ Center for Program Integrity,  said that CMS needs to alter 70 different systems in state government and the private sector that manage Medicare information before the numbers can be removed. He noted, “As an agency, we need to have resources to make that happen.”

CMS said it is considering the of electronic card technologies, such as smart cards, that have built-in security chips to help prevent fraud and identity theft (Al-Faruque, The Hill, 6/25).

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