Predictive Modeling Technology to Assist CMS in Detecting Medicare Fraud

On June 17, 2011, the Centers for Medicare & Medicaid Services (“CMS”) announced that beginning July 1, 2011 it will start to utilize an innovative predictive modeling technology to aid the prevention of Medicare fraud. This CMS announcement comes in the wake of Obama’s Campaign to Cut Waste launch.

The predictive modeling technology should help spot potentially fraudulent claims submitted to Medicare and resembles tools currently used by companies in the private sector to detect fraud. Northrop Grumman, an international provider of information solutions, was selected to develop this technology. The company will use algorithms and an analytical process to review real-time claims data based on patterns (e.g., provider, beneficiary, and service origin). The potentially problematic claims will be assigned “alerts” and “risk scores”. The alerts will be more thoroughly reviewed to prioritize claims for CMS for additional review and to determine the need for further actions. Along with other anti-fraud devices provided by the Affordable Care Act, the predictive modeling technology should allow CMS to displace its “pay & chase” operation model with a preventative fraud and abuse system.

CMS Administrator Donald Berwick, M.D. stated that “this new technology will help us better identify and prevent fraud and abuse before it happens and helps to ensure the solvency of the Medicare Trust Fund.”

For more information regarding fraud and abuse, please contact Adrienne Dresevic, Esq. or Carey F. Kalmowitz, Esq. For more information regarding compliance and audit defense, please contact Abby Pendleton, Esq. or Jessica L. Gustafson, Esq. All attorneys may be reached at (248) 996-8510 or (212) 734-0128. More information may also be obtained at the HLP website.