Fighting Improper Payments And Fraud – Protecting Taxpayer Dollars

By Marilyn Tavenner, Acting Administrator of the Centers for Medicare & Medicaid Services (CMS)

Fighting fraud and waste in the health care system is a top priority for the Obama Administration.  We are committed to using all resources at our disposal in these efforts – and they are paying off.

Just last week, the Departments of Justice and Health and Human Services (HHS) released an updated annual report showing that in FY 2011 anti-fraud efforts have recovered more than $4.1 billion in fraudulent Medicare payments – the second year in a row recovery efforts reached this unprecedented level.  Compare this to just $2.14 billion recovered in FY 2008.  Prosecutions are way up too:  the number of individuals charged with fraud increased from 821 in fiscal year 2008 to 1,430 in fiscal year 2011 – nearly a 75 percent increase.

But we know we need keep doing more to end the “pay and chase” model of fighting fraud.  We need to stop fraud and waste from happening in the first place.  Today we’re taking an important step to protect taxpayer dollars by reducing improper payments to Medicare Advantage plans, an action that is estimated to save $370 million in the first audit year alone.  By improving the way we audit Medicare Advantage contracts, we will reduce the payment error rate for the Medicare Advantage program  and that saves money for Medicare.

We are also using new, advanced techniques to fight fraud.  Starting last year, we have been using “predictive modeling” technology – similar to technology used by credit card companies to identify and fight fraud nationwide.  This effort is just getting started but it’s already making a difference. Since the predictive modeling system was activated, CMS has stopped, prevented or identified $20 million in payments through November 2011 that should not have been made.

In addition, predictive modeling has identified 2,500 leads for further investigation, 600 preliminary law enforcement cases under review and resulted in 400 direct interviews with providers who would not have otherwise been contacted.

Predictive modeling won’t reach its full potential in overnight, but it’s already making an incredible difference and will do even more in the weeks, months and years ahead.

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