CMS Reports Medicare Fraud Prevention System Saves $1.5 Billion

By Kelly A. Briganti, Editorial Director, G2 Intelligence

While Big Data can mean new opportunities for increasing efficiencies and revenues for the laboratory industry, the Centers for Medicare & Medicaid Services (CMS) claims Big Data has yielded big savings for Medicare. CMS claims its Fraud Prevention System (FPS) has identified $1.5 billion in inappropriate payments “through new leads or contributions to existing investigations.”

In a recent issue of The CMS Blog, the agency explained the FPS uses big data and predictive analytics to proactively ferret out fraud and abuse and prevent improper payments from happening: “Taking ‘big data’ mainstream has given CMS the ability to better connect with public and private predictive analytics experts and data scientists, as well as collaborate more closely with law enforcement. The Fraud Prevention System’s ‘big data’ effort has had a profound impact on fraudulent providers and illegitimate payments by allowing us to quickly identify issues and take action.”

CMS claims that 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, recovering $1 billion in savings between 2013-2015. CMS also promises continued focus on use of analytics to fight fraud: “The CMS is now working to develop next-generation predictive analytics with a new system design that even further improves the usability and efficiency of the FPS.”