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CMS Reports $42 Billion in Savings

Aug 1, 2016
CMS recently announced that their Center for Program Integrity’s activities are beginning to save money for the Medicare program, potentially reaping rewards for taxpayers and beneficiaries.  Analysis of dates spanning October 1, 2012 through September 30, 2014 indicates that each dollar invested towards these efforts saved $12.40 for the program .

Multiple initiatives contribute to these savings:
  • Provider enrollment and screening standards
    • Utilization of the Affordable Care Act’s tools  to allow for better screening of providers and suppliers that may be at risk for committing fraud
    • Increasing site visits to enrolled providers and suppliers
    • Enhanced address verification via the Provider Enrollment, Chain, and Ownership System (“PECOS”) software
    • Deactivation of providers and suppliers that have not billed Medicare in the last 13 months 
  • Predictive analytics to prevent fraud, waste, and abuse 
    • Implementation of a Fraud Prevention System using data connections with public and private analytics experts to identify issues and take corrective action
    • Predictive analytics technology contributed to more than $1 billion in savings from 2014 to 2015.
    • Predictive analysis allows CMS to proactively deny claims that may not be appropriately reimbursable, and therefore saves the expense and time of “going after” the provider to return the inappropriate monies.  In fiscal year 2013, savings from these preventive actions represented about 68% of total savings.  In 2014, the savings rose to nearly 74%. 
    • Analyses are run on 4.5 million Medicare claims daily.
    • CMS is now working on a next-generation predictive analytics system with improved efficiency.  
  • Coordination of anti-fraud efforts with federal and external partners
    • CMS provides a forum for information exchange between federal, state, and private partners, receiving and disseminating data that will both reduce duplication of efforts and identify potential fraudulent activity across multiple payers.
    • The Office of Inspector General Work Plan continues to identify additional areas in which CMS is reviewing claims.
    • CMS contractors, state Medicaid agencies, and law enforcement partners offer and receive assistance in fraud prevention. 
CMS estimates that the CPI has saved nearly $42 billion since inception.  They continue to seek out more comprehensive and expansive ways to fight incorrect and fraudulent payments.  

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Nancy Clark

Nancy Clark is a Senior Manager in the Health Care Consulting Group. Her expertise focuses on coding and documentation audits, which includes chart review and report compilation.

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