Medicare Uses Big Data to Fight Fraud (Feb. 2017)

Medicare Employs Sophisticated Data Analytics to Catch $1.5 Billion in Fraud 


The latest in Medicare and Medicaid fraud prevention? A collaboration between the Centers for Medicare & Medicaid Services (CMS), predictive analytic technology, and big data that has contributed to more than $1 billion in savings in 2014 and 2015.

The Fraud Prevention System (FPS) is a proactive strategy that analyzes payment requests submitted by providers. By looking at 4.5 million Medicare claims made on a daily basis, it aims to prevent fraudulent payments rather than pursue inappropriately paid money after the fact.  Since beginning the program in 2011, more than $1.5 billion in inappropriate payments has been identified. As progress is made toward preventing inappropriate payments, CMS is beginning to develop strategies to measure efficacy of compensated providers and track return on investment. These cost-prevention methods have earned the first-ever HHS’ Office of the Inspector General certification in the federal healthcare program stream.

Looking to the future, CMS is developing higher level predictive analytics that aims to further improve the usability and efficiency of the FPS. The commitment of the FPS to preventing fraud, waste and abuse in CMS reimbursement programs protects beneficiaries and taxpayers, as well as setting specific and usable guidelines for providers.