The Obama Administration is looking for sophisticated fraud-fighting tools which could enable federal agencies to catch illegal Medicare and Medicaid practices as they happen.
"Many companies in the private sector, as well as the Centers for Medicare and Medicaid Services, have been testing and using predictive modeling programs to help identify possible fraudulent providers and scams based on historical information about the individual or the company in which the individual is affiliated," the Health and Human Services Agency said in a statement.
As an example, the HHS said, CMS has already taken action to stop federal payments to so-called "false fronts" in Texas identified through sophisticated predictive modeling.
HHS secretary Kathleen Sebelius and Attorney General Eric Holder made their comments at the fourth regional healthcare fraud prevention summit on Thursday at the University of Massachusetts in Boston.
As part of that summit, CMS said it is soliciting "state-of-the-art fraud fighting analytic tools to help the agency predict and prevent potentially wasteful, abusive or fraudulent payments before they occur." The tools would be used by the National Fraud Prevention Program as well as the Department of Justice Health Care Fraud Prevention and Enforcement Action Team (HEAT).
"Preventing fraud is more effective than the old 'pay-and-chase' model of fighting fraud after a sham provider has been paid and disappeared," said CMS Administrator Donald Berwick, MD. "By using new predictive modeling analytic tools, we are better able to expand our efforts to save the millions – and possibly billions – of dollars wasted on waste, fraud and abuse."
In one pilot program CMS has partnered with the Federal Recovery Accountability and Transparency Board to investigate a group of "high-risk" providers. By linking public data with other information like fraud alerts from other payers and existing court records, they uncovered "a sophisticated potentially fraudulent scheme" in which several suspect providers who were already under investigation were found to have opened up multiple companies at the same location, on the same day. They used provider numbers of physicians in other states.
The effort also identified other providers who are now under investigation as well.
The Affordable Care Act provides another $350 million over the next 10 years specifically to fight fraud and abuse involving federal dollars. In its statement, HHS says the act "toughens sentencing for criminal activity, enhances screenings and enrollment requirements, encourages increased sharing of data across government, expands overpayment recovery efforts, and provides greater oversight of private insurance abuses.
"Efforts in fraud detection and enforcement pay for themselves many times over," the statement said.