New Technology Expected to Slash Medicare Fraud

New predictive modeling technology will aid in the fight against fraudulent Medicare claims, announced Health and Human Services Secretary Kathleen Sebelius and U.S. Attorney General Eric Holder at the sixth regional Health Care Fraud Prevention Summit held in Philadelphia on June 17.

This innovative approach to identifying health care system abuses is the latest weapon in the antifraud arsenal developed under the Patient Protection and Affordable Care Act, the health reform law enacted last year. Proponents of the technology tout its ability to prevent fraud prior to payment on Medicare claims, which will help the Centers for Medicare and Medicaid Services (CMS) limit reliance on its current "pay-and-chase" recovery process.

"These are the same type of ... tools that banks and insurance companies use to identify potential fraud," Sebelius said. "They are how your credit-card company can raise the alarm if [it sees] a dozen flat-screen televisions charged to your card in one day."

According to CMS, the "risk-scoring" technology will analyze fee-for-service Medicare claim patterns via identifying information such as beneficiary, provider, and service origin. Any claims identified as potentially problematic will be evaluated and prioritized for further review, leading to investigative or other enforcement action as necessary.

CMS has awarded a one-year, $77-million contract for the new Medicare fraud-detection system to Northrop Grumman in partnership with National Government Services and Verizon's Federal Network Systems.