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GAO Report Finds CMS’ Systems to Detect Fraud ‘Inadequate and ‘Underused’

Despite the large number of Medicare and Medicaid audits and investigations currently being conducted by government contractors, the Government Accountability Office (GAO) recently released a report stating that the federal government’s systems for analyzing Medicare and Medicaid data to detect fraud are “inadequate and underused.”

In 2009, CMS enacted new $150 million systems intended to be a one-stop database accessible to all CMS staff and contractors, law enforcement, and state agencies. However, the report finds that the “share systems data” and other tools to identify and prevent payment of fraudulent claims are still missing. The federal government believes the technology is crucial to curtailing the $60 billion to $90 billion in fraudulent claims paid each year.

The GAO report noted that the current systems don’t even include Medicaid data. Further, only 41 of the 639 analysts charged with using the new detection system have been trained so far. The systems are meant to replace CMS’ “pay and chase” method, which allows criminals to flea before CMS can analyze their claim. The new systems detect fraudulent Medicare and Medicaid claims in real time and deny the claim prior to payment.

Brian Cook, CMS spokesman, explained that, “CMS takes our responsibility to fight health care fraud seriously. As we work to improve these existing systems, we are implementing advanced new technologies to further enhance our efforts to identify potential fraud before payments are made.” CMS implemented a new technology program on July 1, 2011, which is not included in the report. This new prevention and screening method will use similar technology to that of credit card companies.

The GAO hearing will push CMS to enact and use these technologies as soon as possible. As a result, healthcare providers and suppliers should expect increased scrutiny over Medicare and Medicaid claims. CMS uses data mining to identify billing outliers and examine their claims.

Providers with an effective compliance program may be able to identify outliers and potential issues through internal auditing and monitoring, thus keeping providers off of the CMS data analysts’ radar. For assistance with creating a compliance program, conducting internal compliance audits, or for assistance defending Medicare and Medicaid fraud investigations, please contact a Wachler & Associates attorney at 248-544-0888.