Medicare Fraud Prevention System
Finds $210 Million in Improper Payments in Second Year
CMS took action against 938 providers
and suppliers, says report sent to Congress today; anti-fraud strategy
recovered $19.2 billion in last five years
25, 2014 – The Centers for Medicare & Medicaid Services announced today
that its “state state-of-the-art Fraud Prevention System” discovered or
prevented more than $210 million in improper Medicare fee-for-service
payments, nearly double the identified savings of $115.4 million
achieved during the first year of the program. It also
resulted in CMS taking action against 938 providers and suppliers,
according to a report sent to Congress today.
The actions included revocation of billing
privileges, implementation of prepayment review edits, referrals to law
enforcement, and suspension of payments.
“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.
Return on Investment
The FPS identified or prevented more than
actions taken due to the FPS or through
investigations corroborated, augmented, or
expedited by information in the FPS.
The results are a $5
investment, almost double the value of the
FPS in the first implementation year.
“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
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
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
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 (FPS) is the state-of-the-art predictive
analytics technology required under the Small Business Jobs Act
of 2010 (SBJA). Since June 30, 2011, the FPS has run predictive
algorithms and other sophisticated analytics nationwide against
all Medicare fee-for-service (FFS) claims prior to payment. For
the first time in the history of the program, CMS is
systematically applying advanced analytics against Medicare FFS
claims on a streaming, nationwide basis as part of its
comprehensive program integrity strategy.”
– CMS, Executive Summary, Report to Congress, Fraud
Prevention System, Second Implementation Year, June 2014
>>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
Expand and improve models to identify bad actors more quickly and more
Expand FPS beyond fraud into waste and abuse
Deny claims that are not supported by Medicare policy
Identify leads for early intervention by the Medicare Administrative
Evaluate the feasibility of expanding predictive analytics to Medicaid
• Reduce costs of FPS while applying
predictive analytics more effectively and efficiently
• Share lessons learned and best
practices with federal, state, and private partners
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