Predictive Modeling fights Medicare Fraud

Next month the federal government will start to ramp up its campaign against Medicare fraud with technology aimed at uncovering bad claims before they are paid. The approach will use risk-scoring tools to analyze claims as they come in.

Banks and insurance companies already employ such techniques to find potential fraud, Health and Human Services Secretary Kathleen Sebelius said. Because Medicare pays more than 4.5 million claims every working day, she said, “we can’t afford to sit around and wait for tips to come in.”

The Centers for Medicare and Medicaid Services will apply the approach to all new Medicare fee-for-service claims beginning July 1, spokesman Tony Salters said Monday. The agency will run the program through a contract with Northrop Grumman in partnership with National Government Services and Verizon’s Federal Network Systems.

With the help of algorithms, Northrop will analyze claims and flag possible problems by assigning them risk scores and “alerts,” CMS said in a news release. Including options, the contract could last up to four years, with a total cost of almost $77 million, Salters said in an email.

CMS expects to measure results by the number of possibly fraudulent claims found, referrals to law enforcement and other measures, he said.

Read more…