CMS’ fraud crackdown relies on high-tech analytics

The government’s crackdown on Medicare fraud is paying off and healthcare providers that bill the government program would be well advised to know that the Centers for Medicare & Medicaid Services is using a high-tech analytics system to identify inappropriate payments.

Aptly named the “Fraud Prevention System,†the program has identified or prevented $820 million in inappropriate payments in its first three years. In 2014 alone the Fraud Prevention System identified or prevented $454 million in fraudulent billing, according to CMS.

The Fraud Prevention System was created in 2010 by the Small Business Jobs Act, which required CMS to implement a system that could analyze provider billing and beneficiary utilization patterns in order to identify potentially fraudulent claims before they were paid. In past years most healthcare fraud has been detected after the fact, meaning that the government had to chase after the money once it had been paid out.

The system uses “predictive analytics to identify troublesome billing patterns and outlier claims for action, similar to systems used by credit card companies,†according to CMS.

The agency cited several examples in which the use of predictive analytics has been able to successfully identify questionable billing patterns.

In one case, one of 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.

In another case, the system was able to identify an ambulance provider making questionable trips to a hospital. During the three years prior to the system alerting officials, the provider was paid more than $1.5 million for transporting more than 4,500 beneficiaries. A review of medical records found significant instances of insufficient or lack of documentation. CMS also revoked the provider’s Medicare enrollment and referred the results to law enforcement.

CMS says that it plans to expand the Fraud Prevention System and its algorithms to identify lower levels of non-compliant healthcare providers who would be better served by education or data transparency interventions.

The feds have made it clear time and again that fighting healthcare fraud is a top priority. The Health Law Offices of Anthony C. Vitale can help healthcare providers better position themselves for the future by assisting with the implementation of compliance programs and by defending providers who become the target of a healthcare fraud investigation.