Anyone familiar with the predictive-modeling techniques that allow credit-card companies to detect suspicious charges at the cash register might wonder why the CMS couldn't do the same thing with all the blatantly fraudulent charges sent to Medicare.
Late News: CMS to use predictive-modeling tools to root out fraud
Officials say the federal Medicare payer has just inked a $77 million contract to do exactly that, hiring defense contractor Northrop Grumman under a multi-year deal to develop rapid predictive-modeling methods that can analyze claims for federal payments before the bills are paid. In a conference call with reporters, Dr. Donald Berwick, the CMS administrator, said Northrop Grumman and two subcontractors have been hired to set up a system that will analyze Medicare claims in real time for factors such as the geographic distance between provider and beneficiary, the perceived likelihood that services were provided and the ability of a beneficiary to receive the prescribed services. In recent years, officials say, fraudsters have billed for services supposedly rendered halfway across the country, for suspiciously large volumes of specific services, or for diagnostic treatments for which patients could not physically benefit from the care. The CMS in March implemented new final regulations, based on new enforcement techniques authorized in the Patient Protection and Affordable Care Act, that will allow the agency to withhold payments on Medicare claims when authorities have a credible allegation of fraud. Berwick said that predictive modeling will be one of the factors that can lead regulators to withhold payments.
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