Medicare anti-fraud software disappoints senators

HHS Chief Kathleen Sebelius recently praised the program as a key component in joint HHS-Justice Department successes in prosecuting Medicare fraud.  HHS Chief Kathleen Sebelius recently praised the program as a key component in joint HHS-Justice Department successes in prosecuting Medicare fraud. Carolyn Kaster/AP file photo

Software designed to help Medicare managers zero in on fraudulent claims is showing disappointing results, according to three senators who evaluated a program that the Health and Human Services Department praises as an effective new anti-fraud tool.

The Fraud Prevention system, a $77 million predictive analytics software program that the Centers for Medicare and Medicaid Services has been using since summer 2011, scans multiple Medicare claim invoices and kicks out suspicious patterns, such as high-volume wheelchair purchases in one location.

HHS Secretary Kathleen Sebelius on Feb. 14 praised the program as a key component in joint HHS-Justice Department successes in prosecuting Medicare fraud.

But recently summarized results reported only $7,591 in suspended payments, among other indicators, a total called “disappointing” by Sen. Tom Carper, D-Del., the chairman of the Senate Homeland Security and Governmental Affairs Federal Financial Management Subcommittee. Carper has been monitoring Obama administration efforts to reduce improper payments from government.

In December 2011, Carper joined with Sens. Tom Coburn, R-Okla., and Scott Brown, R-Mass., to send a letter to CMS expressing concern that “CMS may not have sufficient metrics and processes in place to ensure the success of predictive analytics technology” in the anti-fraud program. The senators posed 10 detailed questions on the agency’s progress in applying the technology that was required under the 2010 Small Business Operations Act and contracted out to Northrop Grumman Corp. and IBM.

In a Jan. 27 reply, Peter Budetti, CMS deputy administrator and director for program integrity, wrote that his agency has metrics in place and the software is “significantly changing” the way it pursues fraud and has brought successes.

“Predictive analytics are now being used to review all Medicare Part A, Part B and durable medical equipment claims prior to payment. For the first time, CMS has a real-time view of fee-for-service claims across claim types and the geographic zones of its claims processing contractors,” he said.

Leads from the program had resulted in nine overpayment determinations, valued at $2,196,369, and had prompted 437 new investigations and aided 351 existing investigations with real-time information, Budetti added. He said CMS also has revoked Medicare billing privileges and has initiated 26 revocation actions against providers and suppliers based on leads generated by the system, affecting providers who were paid $7,366,974.

The Fraud Protection System “has greatly increased collaboration among our fraud contractors,” such as Office of Inspector General and FBI investigators and Justice prosecutors, Budetti wrote.

Ted Doolittle, deputy director of Medicare’s anti-fraud program, responded to the senators’ complaints in an interview with the Associated Press, saying, “Suspending payments is only one way of stopping the money. There’s lots of ways of stopping the money, and we are using them all. Looking at payment suspensions only -- that’s an unsophisticated view that doesn’t give you a full picture of our activities.”

Carper, according to his staff, has urged CMS to present a comprehensive plan to address the program’s failings and will continue to monitor its progress through his subcommittee oversight and future hearings.

Earlier this month Carper praised CMS’ Medicare Recovery Audit Contractors program for recouping $797 million in 2011 and for being “on track to double the amount of recovered overpayments this year compared to last year.”

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.


When you download a report, your information may be shared with the underwriters of that document.