The Centers for Medicare and Medicaid Services (CMS) will start July 1 to use predictive modeling technology as a tool to fight Medicare fraud.
Similar to technology used by credit card companies, predictive modeling helps identify potentially fraudulent Medicare claims on a nationwide basis and help stop fraudulent claims before they are paid.
This effort builds on anti-fraud tools and resources authorized by the health reform law that are helping move CMS beyond its former “pay & chase” recovery operations to an approach that focuses on preventing fraud and abuse before payment is made, said Dr. Donald Berwick, CMS administrator, in an announcement June 17.
Original Medicare claims will be analyzed using risk scoring technology that applies effective predictive models, an approach similar to that used by the private sector to successfully identify fraud. For the first time, CMS will have the ability to use real-time data to spot suspect claims and providers and take action to stop fraudulent payments before they are paid.
“Today’s announcement is bad news for criminals looking to take advantage of our seniors and defraud Medicare,” Berwick said, adding that the technology will help to assure the solvency of the Medicare Trust Fund.
Northrop Grumman, an information technology and services integrator, is developing CMS’ national predictive model technology format using best practices of both public and private organizations.
The vendor will deploy algorithms and an analytical process that looks at CMS claims – by beneficiary, provider, service origin, or other patterns — to identify potential problems and assign an “alert” and assign “risk scores” for those claims. These problem alerts will be further reviewed to allow CMS to both prioritize claims for additional review and assess the need for investigative or other enforcement actions.
[See also: HHS posts most wanted healthcare fraudsters. ]
The CMS announcement coincided with the sixth regional fraud prevention summit sponsored by the Justice and Health and Human Services departments and taking place in Philadelphia as part of the two agencies’ Health Care Fraud Prevention and Enforcement Action Team.
In 2010, fraud detection and enforcement led to more than $4 billion being returned to the Medicare Health Insurance Trust Fund, the Treasury Department and others.
