Medicare anti-fraud software disappoints senators

Software designed to help Medicare managers zero in on fraudulent claims is showing disappointing results, according to three senators who evaluated a program that the Health and Human Services Department praises as an effective new anti-fraud tool.

The Fraud Prevention system, a $77 million predictive analytics software program that the Centers for Medicare and Medicaid Services has been using since summer 2011, scans multiple Medicare claim invoices and kicks out suspicious patterns, such as high-volume wheelchair purchases in one location.

HHS Secretary Kathleen Sebelius on Feb. 14 praised the program as a key component in joint HHS-Justice Department successes in prosecuting Medicare fraud.

But recently summarized results reported only $7,591 in suspended payments, among other indicators, a total called “disappointing” by Sen. Tom Carper, D-Del., the chairman of the Senate Homeland Security and Governmental Affairs Federal Financial Management Subcommittee. Carper has been monitoring Obama administration efforts to reduce improper payments from government.

In December 2011, Carper joined with Sens. Tom Coburn, R-Okla., and Scott Brown, R-Mass., to send a letter to CMS expressing concern that “CMS may not have sufficient metrics and processes in place to ensure the success of predictive analytics technology” in the anti-fraud program. The senators posed 10 detailed questions on the agency’s progress in applying the technology that was required under the 2010 Small Business Operations Act and contracted out to Northrop Grumman Corp. and IBM.

In a Jan. 27 reply, Peter Budetti, CMS deputy administrator and director for program integrity, wrote that his agency has metrics in place and the software is “significantly changing” the way it pursues fraud and has brought successes.

“Predictive analytics are now being used to review all Medicare Part A, Part B and durable medical equipment claims prior to payment. For the first time, CMS has a real-time view of fee-for-service claims across claim types and the geographic zones of its claims processing contractors,” he said.

Leads from the program had resulted in nine overpayment determinations, valued at $2,196,369, and had prompted 437 new investigations and aided 351 existing investigations with real-time information, Budetti added. He said CMS also has revoked Medicare billing privileges and has initiated 26 revocation actions against providers and suppliers based on leads generated by the system, affecting providers who were paid $7,366,974.

The Fraud Protection System “has greatly increased collaboration among our fraud contractors,” such as Office of Inspector General and FBI investigators and Justice prosecutors, Budetti wrote.

Ted Doolittle, deputy director of Medicare’s anti-fraud program, responded to the senators’ complaints in an interview with the Associated Press, saying, “Suspending payments is only one way of stopping the money. There’s lots of ways of stopping the money, and we are using them all. Looking at payment suspensions only -- that’s an unsophisticated view that doesn’t give you a full picture of our activities.”

Carper, according to his staff, has urged CMS to present a comprehensive plan to address the program’s failings and will continue to monitor its progress through his subcommittee oversight and future hearings.

Earlier this month Carper praised CMS’ Medicare Recovery Audit Contractors program for recouping $797 million in 2011 and for being “on track to double the amount of recovered overpayments this year compared to last year.”