CMS Announces High-Tech Effort Curbs $820M in Faulty Medicare Payments

July 14, 2015

Acting Administrator Andy Slavitt says the Fraud Prevention System has yielded a 10-to-1 return for taxpayers

An investment to fight Medicare fraud is more than paying for itself, CMS Acting Administrator Andy Slavitt announced today. The agency’s Fraud Prevention System has identified $820 million in improper payments in its first 3 years, including $454 million just in calendar year 2014, Slavitt said.

“Very few investments have a 10-to-1 return on taxpayer money,” Slavitt said. “We are proving that in a modern healthcare system you can both fight fraud and avoid creating hassles for the vast majority of physicians who simply want to get paid for services rendered.”

Good data is the key, he said. The availability of the data needed to combat fraud was made possible by the 2010 Small Business Jobs Act, and CMS has also gained tools through the Affordable Care Act. In addition to the Fraud Prevention System, the HHS and the Department of Justice has gone after individual doctors and nurses in a recent crackdown involving 46 individuals and $712 million in false billings.

Having good data reveals patterns of improper practices and allows Medicare to move quickly against providers, making referrals to law enforcement when appropriate. In its third year, the Fraud Prevention System is now creating “high yield” prevention activity, allowing CMS to move beyond the “pay and chase” model, according to Dr Shantanu Agrawal, CMS’ deputy administrator and director of the Center for Program Integrity.

As the program matures, CMS will continue to tweak its formulas to identify lower levels of improper billing, including some providers who might benefit from education in proper billing practices.

For more information, see the Center for Program Integrity.