CMS roots out $820 million in fraud

By Government Health IT Staff
10:38 AM

Detecting fraud in public health systems has been a familiar cry for years. Now, the Centers for Medicare & Medicaid Services (CMS) is doing just that, leveraging an advanced analytics system.

CMS, in fact, announced on Wednesday that by using the Fraud Prevention System it has identified or prevented $820 million in inappropriate payments in the program’s first three years.

"We are proving that in a modern healthcare system you can both fight fraud and avoid creating hassles for the vast majority of physicians who simply want to get paid for services rendered. The key is data," said CMS Acting Administrator Andy Slavitt in a prepared statement.

Indeed, the Fraud Prevention System uses predictive analytics to identify questionable billing patterns and outlier claims, similar to systems used by credit card companies. The system garnered a 10 to 1 return on investment in 2014 alone, preventing a $454 million in fraudulent claims.

"Very few investments have a 10:1 return on taxpayer money," Slavitt said.

CMS has used the system, which was created in 2010 by the Small Business Jobs Act, along with new powers made possible by the Affordable Care Act, to help protect Medicare Trust Funds and prevent fraudulent payments.

In one recent example, the Department of Health & Human Services and the Department of Justice last month announced the largest coordinated anti-fraud action in history. Charges were filed against 243 individuals, including 46 doctors, nurses, and other licensed medical professionals, for alleged participation in Medicare fraud schemes involving approximately $712 million in false billings, CMS said.

During the last five years, the administration’s efforts have resulted in more than $25 billion returned to the Medicare Trust Fund.

The system helps identify questionable billing patterns in real time and can review past patterns that may indicate fraud. In one case, one of the system’s predictive models identified a questionable billing pattern at a provider for podiatry services that resulted in Medicare revoking the provider’s payments and referring the findings to law enforcement.

It also identified an ambulance provider for questionable trips allegedly made to a hospital over three years, with the provider paid more than $1.5 million for transporting more than 4,500 beneficiaries.  CMS said a review of medical records found significant instances of insufficient or lack of documentation. The provider’s Medicare enrollment was revoked by CMS and the results were referred the results to law enforcement. 

“The third year results of the Fraud Prevention System demonstrate our commitment to high-yield prevention activities, and our progress in moving beyond the ‘pay and chase’ model,” said Dr. Shantanu Agrawal, CMS deputy administrator and director of the Center for Program Integrity in the prepared statement. “We have learned a lot in the three years since the Fraud Prevention System began, and as we learn, we continue to become more sophisticated in detecting aberrant billing patterns and developing leads for investigations and action.”

In the future CMS plans to expand the Fraud Prevention System and its algorithms to identify lower levels of non-compliant health care providers who would be better served by education or data transparency interventions.