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Medicare's fraud prevention technology saves billions of dollars

Industry News | Jul 11, 2016

On May 27, the Centers for Medicare and Medicaid Services released a blog post announcing the increasing success of its Fraud Prevention System, which uses big data and predictive analytics to help fight Medicare fraud.

The authors of the post announced since the program began in 2011, it has saved $1.5 billion, $1 billion of which was in 2014 and 2015.

What is big data analytics?

Big data analytics is exactly what it sounds like: the analysis of large amounts of data to provide crucial insight. The SAS Institute, an analytics company, explained that the concept of businesses collecting large amounts of data for analysis has been around for quite some time, but recent technological advancements have made it possible for this analysis to be completed in real time. Thus, big data is not only associated with the massive aggregation of information, but it is also considered an incredibly efficient way to accumulate knowledge that will help drive decision-making.

These days, big data is used in nearly every industry to help businesses track anything from consumer spending habits to the next global disease epidemic. For CMS, big data has made it possible to take a proactive, rather than a reactive, approach to fraud prevention.

"CMS's Fraud Prevention System can help stop illegitimate Medicare transactions before they take place."

The end of "pay and chase"

The blog post's authors praised CMS's new system for its ability to help stop illegitimate Medicare transactions before they take place, as opposed to the traditional way of fighting fraud by hunting down the perpetrator's after an unlawful transaction has already been completed. The Fraud Prevention System analyzes 4.5 million Medicare claims per day before they are paid to determine whether they are legitimate.

One example the authors gave involved a Florida-based home health agency that was billing Medicare for services it never provided. The Fraud Prevention system was able to flag this agency, place it on payment suspension and call for an investigation by law enforcement. As a result of the investigation, the agency's enrollment in Medicare was canceled.

CMS also announced 2015 was the first year that the organization actually saw a return on its investment in the Fraud Prevention System, earning $11.60 for every dollar spent.

"CMS plans to continue working toward finding more efficient, effective ways to prevent fraud."

What's ahead?

The CMS Fraud Prevention System has continued to improve, and the agency has no intention of resting on its laurels. The blog post concluded with a declaration that CMS would continue working toward finding more efficient, effective ways to prevent fraud.

"The CMS is now working to develop next-generation predictive analytics with a new system design that even further improves the usability and efficiency of the FPS," wrote the authors. "Using it and other advanced tools, we are committed to addressing fraud, waste and abuse in the Medicare program to better protect beneficiaries and taxpayers.

How can you protect yourself against fraud?

CMS may have developed a sophisticated Fraud Prevention System, but it doesn't mean you should rest on your laurels, either. It is crucial that every Medicare beneficiary remain vigilant when it comes to protecting themselves against fraud.

First off, CMS explained it is important to understand the different kinds of fraud. Identity theft is one common form. Another is deceptive suppliers. They may request your business even if they are not approved by Medicare, or they may try to trick you into making payments for services you did not receive.

CMS outlined several measures you can take to protect yourself, including:

  • Keep extensive records of every medical service you receive, including dates and times, so you can compare them to your bills and ensure they are correct.
  • Make sure your Social Security card, Medicare card, Medicare number and Social Security number are stored in protected locations.
  • Remember that anyone trying to sell medical supplies at your doorstep who claims to be from Medicare is lying because neither Medicare nor Medicaid participate in door-to-door sales.
  • Keep your Medicare records private from everyone besides your doctor and other Medicare providers.
  • Do as much research on Medicare as possible so you understand your rights as well as what providers can legally bill to the program.