CMS announces Medicare fraud and abuse initiative

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Those who commit Medicare fraud and abuse are facing a new foe: better technology.

The Centers for Medicare & Medicaid Services announced Friday a new initiative, effective July 1, that uses a predictive modeling technology used by credit card companies that can identify potentially fraudulent claims before they are paid. To implement this nationally, CMS has contracted with Northrop Grumman, which has partnered with National Government Services and Federal Network Systems. The initiative aims to replace CMS' current “pay and chase” fraud recovery operation.

According to CMS, Northrop Grumman uses algorithms and an analytical process that analyzes CMS claims by beneficiary, provider, service origin or other patterns to identify and send alerts of potential problems.

“Predictive modeling is a revolutionary new way to detect fraud and abuse, integrating effective and timely actions with protections and savings for Medicare and taxpayers,” said Peter Budetti, M.D, J.D., director of CMS' Center for Program Integrity.

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