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Medicare Trust Fund is now protected by the Fraud Prevention System

Medicare Trust Fund is now protected by the Fraud Prevention System
16 July 2015

In the first 3 years the system has saved $820 million from flowing into the wrong hands

CMS (Center for Medicare & Medicaid Services) has reported that the agency’s Fraud Prevention System (FPS) has prevented fraudulent Medicaid payment in the amount of $820 million with the help of its advanced analytics techniques. This is as the result of implementation of the Fraud Prevention System in the first three years of its operation. The FPS analyses outlier claims and faulty billing patterns using predictive analysis method. Using this system it has tracked down and banned the payment of $454 million in 2014 alone.

Andy Slavitt, the Acting Administrator of CMS “We are proving that in a modern health care system you can both fight fraud and avoid creating hassles for the vast majority of physicians who simply want to get paid for services rendered. The key is data”. Fraud can be easily fought or prevented in a modern health care scenario and at the same time making it easier for physicians to receive payments on time for the services provided. This only requires adequate data and medical records for all medical practices. He also pointed out that there are few investments that earn a 10:1 return on taxpayer’s money.

CMS has widely used the analytics and fraud detection tools of the Fraud Prevention System (FPS) since its inception in 2010. FPS was created by the Small Business Jobs Act and it is supported by new laws such as Affordable Care Act to detect and avoid fraud, and protect Medicare Trust Funds. The major crackdown on fraudulent payment resulted in charges against 243 individuals that include licensed medical professionals, nurses and 46 doctors. These individuals had participated in false billings amounting to $712 million through Medicare schemes. The credit for this major fraud detection goes to the coordinated effort of the Department of Justice and the Health & Human Services (HHS) along with CMS. These simple steps in fraud detection over the past five years have resulted in returning over $25 billion to the Medicare Trust Fund.

Fraudulent billing patterns are identified in real time and these bills are reviewed alongside past billing data. For example, in a recent case, the predictive model spotted questionable billing pattern at a podiatry medical provider. Medicare revoked payments to the medical provider and referred the results to the law enforcement. Similarly the Fraud Prevention System identified anomalies in an ambulance service billing questionable trips to a hospital. The ambulance service received $1.5 million through Medicare for transporting 4500 patients. This happened three years before the system was put in place. While analyzing the medical records of the service there were several instances of improper documentation or no documentation. In this case, the CMS revoked the service provider’s enrollment with the Medicare and handed over evidence to law enforcement.

Dr.Shantanu Agrawal, Director of the Centre for Program Integrity, and Deputy Administrator of CMS said, “The third year result of the Fraud Prevention System demonstrates our commitment to high-yield prevention activities, and our progress in moving beyond the ‘pay and chase’ model.” He also noted that the institution has found various discrepancies in the three years after the use of the Fraud Prevent System. This would be a stepping stone towards implementing a more sophisticated system to detect unusual billing patterns and generate leads to investigate and take appropriate action.

The Fraud Prevention System of CMS is set to expand in the future by using new algorithms to find irregularities in documentation in lower levels of medical providers through data transparency interventions or through education.

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