Wednesday, July 23, 2014

CMS Report Shows Fraud Prevention System Successful

Dianne De La Mare
In its second year of operations, the US Department of Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS) has applied the state-of-the-art Fraud Prevention System (FPS), that employs advanced predictive analytics, and identified or prevented more than $210 million in improper Medicare fee-for-service payments, according to a recent report sent to Congress.

By way of background, the Small Business Jobs Act of 2010 (Act) requires OIG to certify actual and projected savings with respect to improper payments recovered and avoided as relating to the use of the FPS for each of its first 3 implementation years. The FPS is part of CMS’ comprehensive program integrity strategy, and has led the federal government to recover $19.2 billion in fraud recoveries over the last five years. The FPS uses predictive algorithms and other sophisticated analytics to analyze billing patterns against every Medicare fee-for-service claim. It has the capability to stop payment of certain improper claims, without human intervention, by communicating a denial message to the claims payment system.

The system also uses other data sources including compromised Medicare identification numbers and complaints made through 1-800-MEDICARE. CMS expects to expand the use of the FPS beyond the initial focus of identifying potential fraud into the areas of waste and abuse, which will increase future savings. CMS also has pilot projects underway evaluating the expansion of the program to Medicare Administrative Contractors for early intervention.

To obtain the CMS press release and entire report go to

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