Inside CMS’ war room
The battle against fraud comes under scrutiny
Healthcare fraud is big business, and so is the battle to stop it. Critics, however, want better answers from the Obama administration about how it is spending federal funds in the fight against the estimated $60 billion lost to fraud, waste and abuse in federal healthcare programs annually.
Last week, the federal government’s new healthcare-fraud-fighting consortium, the Center for Program Integrity, formally opened its new $3.6 million command center in an unidentified office park in the Baltimore metro area. Images from inside the fraud nerve center depict a ring of work stations surrounding a massive war room-style digital screen displaying data trends.
The new CMS Program Integrity Command Center is home to hundreds of workers as well as the new $77 million predictive analytics program that is scanning 4.5 million Medicare feefor-service claims a day looking for suspicious patterns, using the same techniques as credit card companies scanning their financial networks for fraudulent charges.
The center houses hundreds of fraud-fighting employees from Medicare, Medicaid, HHS’ inspector general’s office and the FBI, along with investigators from local law enforcement and the private zone program integrity Contractors, all of whom will work leads gleaned from the digital tools in real time.
“The result is that investigations that used to take days and weeks can now be done in a matter of hours,” Dr. Peter Budetti, director of the program integrity center, wrote in a CMS blog post. “And this new technology can help detect and prevent potential problems and payments. That can mean millions of taxpayer dollars staying out of the hands of fraudsters.”
However, two members of the Senate Finance Committee—ranking member Orrin Hatch (R-Utah) and Tom Coburn (R-Okla.)— are asking some pointed questions about whether it’s money well-spent.
In a July 31 letter demanding answers from the CMS, the senators said their concern was motivated by a lack of accountability on CMS’ part to show whether the year-old predictive modeling program, known as the Fraud Prevention System, has been successful.
“For some time, we have heard a growing chorus of concerns from a wide range of credible entities who have expressed concerns about FPS,” the senators wrote.
The public has received differing messages about the performance of the system, which was mandated in the Small Business Jobs Act of 2010 and designed through a contract with defense firm Northrop Grumman.
The Associated Press reported in February that the system had prevented only one suspicious payment by the end of 2011, for $7,591.
In their July 31 letter, Hatch and Coburn said the CMS had not yet used the system to stop any claims before they were paid.
Yet in an April 4 e-mail to Modern Healthcare, an HHS spokesman said more than $30 million in improper payments had been stopped, prevented or identified. That included $9 million in cases referred to law enforcement, $2.2 million in overpayment determinations and $1.5 million saved through pre-payment and auto-deny programs.
“We understood from the beginning that predictive modeling would not reach its full potential in a day, but would evolve into the most effective tool for preventing fraud in history,” the HHS official said in the e-mail.
The CMS announced in a May 11 contract-document form that the system “will become mature” in June 2012.
Asked for more up-to-date information last week, CMS spokesman Brian Cook wrote in an e-mail that the Small Business Act required the agency to certify its performance numbers with HHS’ inspector general’s office, and that it plans to release those figures to Congress this fall. He declined to release preliminary estimates.
Coburn and Hatch criticized the CMS’ lack of transparency or concrete goals, especially since the agency was spending money on such lofty projects as the large Command Center computer screen while not implementing cheaper recommendations to fight fraud.
The 2011 Compendium of Unimplemented Recommendations from the inspector general’s office lists 22 ideas that investigators say could save Medicare money, but which have not been fully implemented by the staff. The 2012 report is due this year.
CMS acting Administrator Marilyn Tavenner said in a Feb. 7 letter that the agency is already working to address many ideas put forward by HHS’ inspector general, but that any ongoing efforts are not formally considered “implemented” by the inspector general’s office.
Hatch and Coburn also questioned the July 26 announcement that the CMS was partnering with a half-dozen private insurers to prevent billing fraud.
The program is designed to share information among public and private payers on fraud schemes, vulnerable billing codes and geographic hot spots.
The senators said it was not clear, however, what organizations will be sharing health information on what systems, and which “contractor or trusted third party” would be conducting the analysis.
The fraud command center, shown in a video the agency provided, includes a $77 million predictive analytics program that can scan 4.5 million fee-for-service claims a day.