CMS Report to Congress Cites Program Integrity for $42 Billion in Savings, $12.40 ROI

In a new report to Congress, the Centers for Medicare & Medicaid Services states the Program Integrity activities have saved Medicare and Medicaid $42 billion during Fiscal Years 2013 and 2014 (Oct. 1, 2012 - Sept. 30, 2014). The agency claims $12.40 was saved for every dollar spent on program integrity efforts. Those efforts included a focus on ensuring providers seeking to enroll in Medicare are properly screened, using predictive analytics to identify fraud and abuse, and coordination with law enforcement. Specifically, the agency credited assistance from Medicare contractors, state Medicaid agencies and law enforcement for these successes.

“CMS has achieved this impact by using a multifaceted approach ranging from provider enrollment and screening standards, to use of enforcement authorities, to use of advanced analytics such as predictive modeling,” said Shantanu Agrawal, M.D., deputy administrator and director, Center for Program Integrity, in a CMS Blog post announcing the report.

The report also claims savings due to preventing fraud and abuse increased to 74 percent. Prior year’s savings was 68 percent. “This development means that more taxpayer dollars intended to care for the beneficiaries are not being paid at all, avoiding the need to recover improperly paid amounts from health care providers and suppliers,” explained Agrawal.

Earlier this year, CMS touted the successes of using predictive analytics in its Fraud Prevention System, saying it identified $1.5 billion in inappropriate payments “through new leads or contributions to existing investigations” since the FPS was first put into use. In a blog post this year, the agency claimed the FPS streams 4.5 million pre-paid claims daily and yielded an $11.60 return on investment in 2015 for each dollar spent on the system. The agency reported that for 2015 alone the FPS “helped identify or prevent $654.8 million in inappropriate payments … through actions taken due to the FPS or through investigations expedited, augmented, or corroborated by the FPS.” That savings was 44% higher than the prior year under the program.

In February, the agency also highlighted its heightened provider enrollment screening activities, thanks to the Affordable Care Act’s provision of “tools to enhance our ability to screen providers and suppliers upon enrollment and identify those that may be at risk for committing fraud, including the use of risk-based screening of providers and suppliers.”

CMS indicated it was also increasing site visits to enrolled providers and using data monitoring and IT solutions to ensure enrollment compliance and thanked the Government Accountability Office for its recent report identifying “areas for improvement in our Provider Enrollment, Chain, and Ownership System (PECOS)—the IT system for Medicare enrollment—regarding verification of provider or supplier practice locations.”

Takeaway: CMS continues to report that its Medicare fraud and abuse prevention and enforcement activities are successfully preventing and detecting inappropriate Medicare payments and claims robust returns on its investment.