Government Seeks Anti-Fraud Modeling Apps

At a Boston fraud-prevention summit, the Obama administration announced a plan to use predictive-modeling software to fight Medicare and Medicaid fraud. Taking a tip from banks, credit card firms and insurance companies, CMS (the Centers for Medicare and Medicaid Services) will implement predictive-modeling software to fight fraudulent claims for Medicare and Medicaid and the Children's Health Insurance program.

U.S. Department of Health and Human Services Secretary Kathleen Sebelius and Attorney General Eric Holder made the announcement at a health care fraud-prevention summit at the University of Massachusetts on Dec. 16.

"Simply put, we have taken our fight against health case fraud to a new level, and I am committed to continued collaboration, vigilance and progress," Attorney General Eric Holder said in a statement.

Predictive-modeling applications use analytics to create statistics on future behavior and trends. Companies that offer these tools include IBM's SPSS division, Oracle, SAP and StatSoft.

CMS, an agency of HSS (Department of Health and Human Services), is currently seeking bidders from interested software vendors, according to Peter Ashkenaz, a spokesperson for CMS. Contracts will follow.

"We issued a solicitation asking the companies to bid on software programs, so at this point there is no specific program that we've identified," Ashkenaz told eWEEK.

Predictive-modeling tools will prevent fraudulent health care providers from invading the system and be able to track suspicious billing, affiliations and financial trends. The programs rely on past information about an individual or company to identify fraudulent activity, CMS reports.

"By using new predictive-modeling analytic tools, we are better able to expand our efforts to save the millions—and possibly billions—of dollars wasted on waste, fraud and abuse," CMS Administrator Dr. Donald Berwick said in a statement. The new analytic tools will support the efforts of the HHS and HEAT (Department of Justice Health Care Fraud Prevention and Enforcement Action Team). CMS has already used predictive modeling tools to halt payments to "false fronts" in Texas, according to the agency. Another example involves a partnership between CMS and RATB (Federal Recovery Accountability and Transparency Board) to uncover high-risk providers. The effort spotted suspect providers by combing public data and relying on fraud alerts from courts and health care payers. "Using the most up-to-date technologies and adopting best practices across the nation's health care system, we have a better chance of finding fraudulent and abusive providers before they even start billing Medicare or other health insurance," Dr. Peter Budetti, director of CMS' Center for Program Integrity, said in a statement.

The Boston meeting was part of a series of fraud-prevention summits announced by President Obama on June 8. Obama had formed a Financial Fraud Enforcement Task Force in November 2009 to respond to the struggling economy and an increase in fraud. "This has been a remarkable year for cracking down on health care fraud—and our success has been built on initiatives like these, combining the experience and insight of our law enforcement teams with new resources and cutting-edge technology," Sebelius said in a statement. "Thanks to the new tools and resources provided under the Affordable Care Act, we are more effective at going after the fraudsters that are stealing taxpayer dollars."

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