The Centers for Medicare and Medicaid Services’ advanced analytics system has identified or prevented $820 million in inappropriate Medicare payments during the first three years of its operation, according to CMS. Yet, questions remain about the overall impact of the system on combating fraud.

The CMS Fraud Prevention System (FPS) uses predictive analytics to help identify suspicious billing patterns in real time and to review past patterns that may indicate fraudulent activity. Directed by the 2010 Small Business Jobs Act, the system was implemented in July 2011 to more proactively prevent fraud in the Medicare program—as opposed to taking a reactive “pay and chase” approach.

According to the agency, in one case, 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.

Also See: Better Analytics Help CMS Catch More Fraud

“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 written statement.

Specifically, FPS analyzes Medicare claims data using models of fraudulent behavior, resulting in automatic alerts on specific claims and providers, which are then prioritized for analysts to review and investigate. However, a 2012 Government Accountability Office report found that “while the system draws on a host of existing Medicare data sources and has been integrated with existing systems that process claims, it has not yet been integrated with the agency’s payment-processing system to allow for the prevention of payments until suspect claims can be determined to be valid.”

Further, last month the bipartisan leadership of the House Energy and Commerce and House Ways and Means Committees sent a joint letter to the GAO requesting a formal review of the Fraud Prevention System.

“GAO has previously identified key practices for using predictive analysis systems, including leveraging the results of predictive analysis to address service- or system-specific weaknesses that can lead to payment errors, such as gaps in prepayment edits,” stated the letter. “It is unclear whether CMS is using FPS to identify these broader program vulnerabilities in Medicare and taking action based on these vulnerabilities throughout the program.”

In addition to seeking clarification on how CMS is using the system in Medicare, lawmakers asked government auditors to review CMS plans to implement the program for Medicaid and the Children’s Health Insurance Program—as is directed under law.

Register or login for access to this item and much more

All Health Data Management content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access