Predictive Technology Fights Medicare Fraud

Crooks who choose to defraud Medicare will now have to square up against technology in uniform. Predictive modeling is the Centers for Medicare & Medicaid Services’ (CMS’) newest tool to help an administration-wide campaign to cut waste, fraud, and abuse in Medicare beginning July 1. The initiative uses similar technology to that used by credit card companies to identify potentially fraudulent Medicare claims on a nationwide basis, ideally before they are paid, and builds on other tools and resources provided by the Affordable Care Act, the federal agency said.

The strategy indicates a switch from traditional “pay and chase” investigations used by CMS to an approach that focuses more on preventing fraud and abuse. Original Medicare claims will be analyzed using risk scoring technology applying effective prediction models, CMS said. It is similar to that used by the private sector for identity fraud and allows CMS the ability use real-time data to spot suspect claims and providers, taking action to stop fraudulent payments before they are paid.

Northrup Grumman will develop CMS’ national predictive model technology format using best practices of public and private stakeholders, according to CMS. The agency said it used “industry guidance, innovative ideas from private and provider entities and related data in developing the scope of work for this national fraud prevention program.” According to CMS, the contract is being implemented nationally and they are ahead of schedule.

The model, CMS said, uses “algorithms and an analytical process that looks at CMS claims by beneficiary, provider, service origin, and other patterns to assign alert and risk scores” for those claims. The alerts will be reviewed to allow CMS to both prioritize claims for additional review and assess the need for investigative and enforcement actions.

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