CMS leverages technology in move from 'pay-and-chase' to fraud prevention

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The Centers for Medicare & Medicaid Services will utilize computer technology to shift from detecting and then prosecuting fraud (“pay-and-chase”) to preventing it, according to a CMS official who spoke at last week's National HIPAA Summit in Washington, D.C.

Peter Budetti, director of the Center for Program Integrity at CMS, said the agency has seen success with its automated risk-based screening program as well as its fraud prevention system driven by data analytics, the Bureau of National Affairs reported.

The risk-based screening program, introduced at the end of 2011, puts Medicare providers into limited, moderate or high risk categories. This makes it harder for unscrupulous providers to enroll while enabling more strategic fraud prevention efforts. Risk categories are assigned based on past suspicious behaviors as well as provider type. For example, all durable medical equipment providers are tagged as high risk.

With regard to the fraud prevention system, Budetti praised its social network analysis capabilities. Conventional data analysis screens fee-for-service claims against known patterns of fraud, while social network analysis looks for suspicious provider relationships that could signal fraudulent activities. After its first year of operation, the system has a projected 3-to-1 return on investment, Budetti said.

Also at last week's conference, a Department of Health and Human Services official said that with the updated omnibus Health Information Privacy and Portability Act rule taking effect next month, the federal government is set to expand HIPAA enforcement efforts. Investigators will focus in particular on organizations with “long-standing patterns of noncompliance,” said HHS Office for Civil Rights Director Leon Rodriguez.

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