CMS to Tap Tech for Medicare Fraud Fight

The Centers for Medicare & Medicaid Services said Friday that starting July 1, it will use new predictive modeling technology in a "real-time" fight against Medicare fraud.

The new predictive modeling technology, similar to that used by credit card companies, helps identify potentially fraudulent Medicare claims on a nationwide basis, and helps stop fraudulent claims before they are paid. The initiative builds on the new anti-fraud tools and resources provided by the Affordable Care Act that are helping move CMS beyond its former "pay & chase" recovery operations to an approach that focuses on preventing fraud and abuse before payment is made, CMS said.

"Today's announcement is bad news for criminals looking to take advantage of our seniors and defraud Medicare," CMS Administrator Donald Berwick, MD, said in a media release. "This new technology will help us better identify and prevent fraud and abuse before it happens and helps to ensure the solvency of the Medicare Trust Fund."

Original Medicare claims will be analyzed using innovative risk scoring technology that applies effective predictive models, an approach similar to that used by the private sector to successfully identify fraud. For the first time, CMS will have the ability to use real-time data to spot suspect claims and providers and take action to stop fraudulent payments before they are paid, CMS said.

Northrop Grumman was selected through a competitive procurement to develop CMS' national predictive model technology format using best practices of both public and private stakeholders. The contract is being implemented nationally and ahead of schedule.

Northrop Grumman will deploy algorithms and an analytical process that looks at CMS claims – by beneficiary, provider, service origin or other patterns — to identify potential problems and assign an "alert" and assign "risk scores" for those claims. These problem alerts will be further reviewed to allow CMS to both prioritize claims for additional review and assess the need for investigative or other enforcement actions, CMS said.