Latest Fraud Takedown and CMS Fraud Detection Strategies Yield Big Returns

The U.S. Department of Health and Human Services (HHS), its Office of Inspector General, the Federal Bureau of Investigation, and the Justice Department's Criminal Division recently announced a nationwide "takedown" of 243 individuals in connection with an alleged Medicare fraud scheme involving more than $700 million in false billings. That takedown and a Centers for Medicare and Medicaid Services announcement regarding its Fraud Prevention System highlight the recent successes the government is having with using the latest in technology to fight fraud.

More Strategic Efforts Lead to Takedown
The individuals charged include 46 doctors, nurses and other licensed health care professionals. "The coordinated takedown is the largest in Strike Force history, both in terms of the number of defendants charged and the loss amount," according to an HHS press release.

"This record-setting takedown sends a message to would-be perpetrators that health care fraud is a risky way to line your pockets," said HHS-OIG Inspector General Daniel R. Levinson in the release. "Our agents and our law enforcement partners stand ready to protect these vital programs and ensure that those who would steal from federal health care programs ultimately pay for their crimes."

The Affordable Care Act is credited with providing new enforcement resources and $350 million in funding that financed additional prosecutors and expanded Strike Force activities, enabling enforcement initiatives such as this takedown. Assistant Attorney General Leslie R. Caldwell also explained in the release how the Department of Justice has become "more strategic" in finding and prosecuting fraud: "We obtain and analyze billing data in real time. We target hot spots—areas of the country and the types of health care services where the billing data shows the potential for a high volume of fraud—and we are speeding up our investigations."

The allegations in this takedown include anti-kickback violations, money laundering and aggravated identity theft relating to home health care, psychotherapy, physical and occupational therapy, durable medical equipment and prescription drugs. The government alleges that the individuals charged billed for equipment, care and services not actually provided. While the cases involve allegations only at this point and must be proved in court, with these new charges, the Department of Justice said national takedown operations to date have yielded charges for over 900 individuals and involved more than $2.5 billion in billings. This latest takedown emphasizes the increased attention and resources devoted to health care fraud enforcement efforts and prosecution of physicians and other individuals in addition to large organizations.

FPS Use of Analytics Proactively Fights Fraud
The takedown also comes at the same time that the Centers for Medicare and Medicaid Services announced its Fraud Prevention System (FPS), an "advanced analytics system," has uncovered $820 million in inappropriate payments. The system uses state of the art techniques similar to those alluded to in comments regarding the Strike Force takedown. The FPS employs "predictive modeling and other analytics technologies to find and avoid payment of improper Medicare claims." Using analytics in much the same way credit card companies do, the system finds "troublesome billing patterns and outlier claims." CMS indicated in a press release that it intends to use the system not just to identify and prosecute fraud but also to ferret out potential payment issues that are not necessarily the result of illegal intentions but could be "better served by education or data transparency interventions."

"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," Acting CMS Administrator Andy Slavitt said in a press release. Referring to the system's identification in 2014 of $454 million in improper payments, Slavitt declared: "Very few investments have a 10:1 return on taxpayer money."

CMS explains that the analytics help spot potentially improper billing patterns and use information about past billing practices to find fraud. CMS says these "predictive models" helped it identify questionable payments to a podiatrist and ambulance provider. CMS Deputy Administrator and Director of the Center for Program Integrity Dr. Shantanu Agrawal emphasized the system's ability to facilitate a more proactive approach to fighting fraud: "The third year results of the Fraud Prevention System demonstrate our commitment to high-yield prevention activities, and our progress in moving beyond the 'pay and chase' model."

Takeaway: New technologies and use of data analytics give enforcement efforts a boost and aid in not only detecting fraud but finding and preventing potential for improper payments as well.