fraud prevention

CMS fraud prevention system stops billions in improper payments

A new report from the Government Accountability Office found that the fraud prevention system used by the Centers for Medicare and Medicaid Services helped to stop billions of dollars in improper payments.

FPS analyzes Medicare claims to identify health care providers with suspect billing patterns for further investigation and to prevent improper payments. Prior to implementing the FPS, the CMS used a “pay and chase” method that involved first paying bills from health care services providers, then investigating potential fraudulent claims before recovering improper payments.

The analysis is done using a set of models that develop leads for investigators and execute automated payment edits.

Leads are created by looking at billing patterns, such as a disproportionate number of services in a single day from a single provider.  “FPS simultaneously risk-scores providers identified by the models to prioritize them for potential investigation,” the report said.

Automated payment edits can deny claims if they violate rules or policies like coverage utilization limits. The system does not automatically deny claims on risk alone, GAO said.

Fraud investigations are handled by seven zone program integrity contractors. One in five of ZPIC’s investigations began with a FPS lead in fiscal years 2015 and 2016, the report said.

“In its most recent report, CMS reported that FPS had cumulatively helped prevent or identify nearly $1.5 billion in improper and potentially fraudulent payments from its implementation through the end of calendar year 2015,” GAO wrote.

While the system helps find potential fraud, it doesn’t speed up the actual investigations, ZPIC officials told GAO -- although CMS hasn’t “tracked data to assess FPS’s effect on the timeliness of investigation processes.”

CMS plans to upgrade its  IT infrastructure with a new contractor workload management system that will provide information on how long investigations take and will be used to monitor program performance. The insight from this new data won’t be available, though, for “several years” as CMS rolls out the program and collects several years' worth of data to ensure accurate assessments.

Read the full report here.

About the Author

Matt Leonard is a former reporter for GCN.

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