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CMS Fraud Prevention System Identified or Prevented $210 Million in Improper Medicare Payments in 2nd Year of Operations

CMS Fraud Prevention System Identified or Prevented $210 Million in Improper Medicare Payments in 2nd Year of Operations

In its second year of operations, CMS’ state-of-the-art Fraud Prevention System, that employs advanced predictive analytics, identified or prevented more than $210 million in improper Medicare fee-for-service payments, double the previous year. It also resulted in CMS taking action against 938 providers and suppliers, according to a report sent to Congress today.

“CMS is using the best of private sector technology to move beyond the ‘pay-and-chase’ approach to protect the Medicare Trust Funds,” said CMS Administrator Marilyn Tavenner. “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.”

The Fraud Prevention System is a key element of the anti-fraud strategy that has led to a record $19.2 billion in fraud recoveries over the previous five years. The Fraud Prevention System uses predictive algorithms and other sophisticated analytics to analyze billing patterns against every Medicare fee-for-service claim. Building on its expert knowledge for investigators and analysts, CMS is leading the government and healthcare industry in systematically applying advanced analytics on a nationwide scale. The system also uses other data sources including compromised Medicare identification numbers and complaints made through 1-800-MEDICARE.

The tool is part of CMS's comprehensive program integrity strategy. For example:

  • The Fraud Prevention System is used as part of an agency focus on home health services in South Florida. CMS identified this type of service in South Florida as an area of high risk to our programs. The Fraud Prevention System led to investigations and administrative actions, which ultimately led to the revocation of the billing privileges of home health agencies, with potential savings worth more than $26 million.
  • The Fraud Prevention System identified a group practice for having a high risk of inappropriate billing. A contractor made an unannounced site visit, interviewed beneficiaries, and reviewed medical records. The evidence showed that the aides working in the group were not appropriately trained and the provider was billing Medicare for services that were in fact performed by unqualified individuals. A provider was removed from the Medicare program, preventing over $700,000 of inappropriate payments and ensuring that Medicare beneficiaries receive quality care from trained providers.

CMS also expects to expand the use of the Fraud Prevention System beyond the initial focus on identifying potential fraud into the areas of waste and abuse, which will increase future savings. The Fraud Prevention System now has the capability to stop payment of certain improper claims, without human intervention, by communicating a denial message to the claims payment system.

CMS also has pilot projects underway evaluating the expansion of program that provides waste, fraud and abuse leads to Medicare Administrative Contractors for early intervention.

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