Medicare Fraud Prevention Initiatives Saved $42 Billion in Two Years

Combating healthcare fraud involves significant logistical challenges. Massive healthcare programs like Medicare are subject to many regulations, but regulators cannot physically be present every time someone misuses taxpayer funding in a healthcare setting. This is precisely why federal healthcare programs are frequent targets of large-scale fraud schemes.

When hospitals, home healthcare agencies, nursing homes and other providers submit fraudulent claims, it can take time for the agencies responsible for reviewing those claims to spot and investigate suspicious behavior. Healthcare fraud isn’t just a collosal waste of taxpayer funding; it can put patients in danger. The earlier it is identified, the safer our healthcare system will be overall.

That’s why the fraud prevention initiative implemented by the Center for Medicare and Medicaid Services (CMS) is so important. From 2012–2014, the agency’s Medicare program integrity efforts saved an impressive $42 billion in federal funding that could otherwise have been lost to fraud and misconduct.

Identifying fraud early on

On July 20th, 2016, the CMS released a report detailing the progress and impact of its fraud prevention initiatives. According to the report, that $42 billion in savings amounts to a return of $12.40 for every $1 spent on Medicare program integrity.

Predictive analytics play a significant role in the Fraud Prevention System. The program leverages advanced analytics to run a daily assessment of millions of nationwide Medicare claims before payments are issued.

The CMS notes that in the past, “pay-and-chase” efforts were the primary method of catching fraudsters. The use of big data has proven effective in identifying fraudulent patterns far earlier in the process.

This is a crucial development, not just for the budding fraud schemes that have been caught through this effort. As the Fraud Prevention System matures, it may also prove a powerful deterrent.

When fraudsters know that, in all likelihood, they will be able to receive millions of dollars in Medicare reimbursements before their scheme is identified, they may easily decide that committing such crimes is worth the risk. If, on the other hand, it is clear that every claim submitted is under careful scrutiny, the immediate risk of committing healthcare fraud becomes much greater.

Improving physician screening protocol

Provider screening is another key component of the CMS’ efforts to prevent fraud schemes before they happen. For obvious reasons, healthcare providers that have committed fraud in the past or who have been flagged for suspicious claims submissions should be identified upon and throughout their enrollment as Medicare or Medicaid participants.

To do so, the CMS uses screening tools provided by the Affordable Care Act. The agency has also increased site visits and data analysis efforts to keep a close eye on physicians who may be receiving improper payments or otherwise disregarding federal healthcare regulations. Improving the technology Medicare uses has significantly strengthened the program’s ability to properly monitor the considerable amount of data it possesses.

Building a stronger healthcare system

Initiatives like the CMS Fraud Prevention System are incredibly important because they demonstrate a commitment to protecting and preserving taxpayer funding. Furthermore, the reports that agencies like the CMS release provide necessary transparency, and help healthcare providers, beneficiaries and taxpayers understand the broader context of the challenges this sector is facing.

The CMS report is especially constructive a month after the Department of Justice announced the largest healthcare fraud takedown to date, which involved 301 healthcare providers and over $900 million in defrauded funds. That victory was enabled by collaborative efforts between the DOJ and the Department of Health and Human Services’ Medicare Fraud Strike Force.

It’s easy to become cynical about our healthcare system, or to believe that the government doesn’t have the resources or expertise to help improve it. However, when healthcare agencies invest in effective technology, well-executed prevention strategies, and swift prosecution of those who defraud the system, meaningful progress is possible.