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CMS Saves $42B Through Healthcare Fraud Prevention Activities

CMS reported that its healthcare fraud prevention initiatives have saved the Medicare and Medicaid programs almost $42 billion in 2013 and 2014.

By Jacqueline Belliveau

- By using a more proactive approach to healthcare fraud protection, CMS has saved the Medicaid and Medicare programs nearly $42 billion in fiscal years 2013 and 2014.

CMS saved $42 billion using a healthcare fraud prevention strategy

In a post on its official blog, CMS attributed the savings to an increase in program integrity activities that focus on preventing and deterring healthcare fraud and improper payments rather than its previous “pay-and-chase” approach, which tasked CMS with recovering improper payments.

“This means that all our efforts – making sure healthcare providers enrolled in our programs are properly screened; using predictive analytics to prevent fraud, waste, and abuse; and coordinating our anti-fraud efforts with our federal and external partners – have resulted in billions of dollars saved in Medicare and Medicaid over the two-year period,” wrote Shantanu Agrawal, MD, Deputy Administrator and Director of CMS Center for Program Integrity.

Its efforts have saved $12.40 for every dollar invested in Medicare program integrity initiatives, added Agrawal. The savings can be used to boost funds for Medicare, Medicaid, and the Children’s Health Insurance Program, which will help CMS provide timely and appropriate care for beneficiaries and protect the programs for future generations.

“An important part of this mission is to ensure that the resources the nation devotes to health program is used to keep our nation’s seniors and low-income families healthy,” Agrawal wrote. “This is why CMS has a comprehensive and robust program integrity strategy that addresses and prevents potentially fraudulent and improper payments in Medicare and Medicaid.”

The proactive approach has been more successful than its “pay-and-chase” method, according to the blog post.

In fiscal year 2013, about 68 percent of total Medicare and Medicaid savings came from prevention activities. By fiscal year 2014, savings from preventing potentially improper and fraudulent payments accounted for 74 percent of total savings.

CMS Healthcare Fraud Prevention Savings 2013-2014

Image Credit: CMS

“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 healthcare providers and suppliers,” continued Agrawal.

CMS also recognized several groups that facilitated program integrity activities, including contractors, state Medicaid agencies, and law enforcement officials.

While the agency has saved billions in the last couple of years, it stated that it will regularly update and assess its program integrity initiatives. CMS also called on healthcare stakeholders to provide comments on improving its healthcare fraud prevention strategy.

The latest blog post from CMS comes almost a month after the Department of Health and Human Services (HHS) announced the largest healthcare fraud takedown in its history.

In collaboration with the Department of Justice, HHS helped to charge 301 individuals, including 61 physicians and licensed medical professionals, with allegedly participating in healthcare fraud activities, totaling $900 million in false medical billing.

A large portion of the individuals charged were involved in home healthcare, psychotherapy, physical and occupational therapy, durable medical equipment services, and prescription drug services.

Both the recent healthcare fraud takedown and the latest blog post from CMS represent a systematic commitment to reducing fraudulent payments in the Medicare and Medicaid programs. Federal agencies have also received a boost in healthcare fraud prevention funds under the Affordable Care Act.

“Millions of seniors depend on Medicare for essential health coverage, and our action shows that this administration remains committed to cracking down on individuals who try to defraud the program,” said Sylvia Burwell, HHS Secretary.  “We are continuing to put new tools and additional resources to work, including $350 million from the Affordable Care Act, for healthcare fraud prevention and enforcement efforts.”

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