Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Policy & Regulation News

VA Leverages CMS Data Analytics to Reduce Healthcare Fraud, Waste

The VA and CMS announced a new partnership that will bring CMS data analytics and program integrity strategies to the VA to reduce healthcare fraud, waste, and abuse.

Healthcare fraud, waste, and abuse

Source: Thinkstock

By Jacqueline LaPointe

- The country’s two largest public-private healthcare payment systems, the VA and CMS, recently announced that they will partner to reduce healthcare fraud, waste, and abuse for veterans using data analytics tools.

“The VA-HHS alliance represents the latest example of VA’s commitment to find partners to assist with identifying new and innovative ways to seek out fraud, waste, and abuse and ensure every tax dollar given to VA supports Veterans,” stated VA Secretary David J. Shulkin, MD. “This effort marks another step toward achieving President Trump’s 10-point plan to reform the VA by collaborating with our federal partners to improve VA’s ability to investigate fraud and wrongdoing in VA programs.”

CMS Administrator Seema Verma added that the VA will leverage the federal agency’s efforts to reduce healthcare fraud, waste, and abuse using data analytics tools.

“We have a special obligation to keep America’s promise to those who have served our country and ensure that Veterans receive high-quality and accessible healthcare,” she said. “CMS is sharing lessons learned and expertise to support VA to identify waste and fraud and eliminate these abuses of the public trust. Using state-of-the-art data analytics, CMS is partnering with VA to better detect and prevent wrongdoing in its programs.”

CMS recently refocused their healthcare fraud, waste, and abuse strategy. Rather than the traditional “pay-and-chase” method, which required CMS to recover improper payments, the federal agency emphasized fraud prevention efforts.

The proactive approach saved the Medicaid and Medicare programs nearly $42 billion in 2013 and 2014, CMS reported. And data analytics tools were key to realizing significant savings.

The federal agency uses the Fraud Prevention System, a predictive analytics tool that identifies fraudulent claims and illegitimate Medicare payments. The tool analyzes approximately 4.5 million Medicare pre-paid claims per day to pinpoint possible issues before the healthcare program reimburses providers.

The Fraud Prevention System contributed to over $1.5 billion in savings in 2014 and 2015 by preventing inappropriate and improper payments from being paid, according to CMS.

Building on the success of the Fraud Prevention System, CMS stated in 2016 that agency leaders are “now working to develop next-generation predictive analytics with a new system design that even further improves the usability and efficiency of the FPS [Fraud Prevention System].”

The VA intends to capitalize on the data analytics tools already used by CMS to identify and prevent healthcare fraud, waste, and abuse relating to veteran care.

The federal department also plans to partner with industry experts in the commercial sector to implement the latest health IT, statistics, and data analytics tools to prevent healthcare fraud. Industry experts provided information to the VA in November 2017 on the newest commercial sector products and techniques for fraud detection.

In April 2018, the VA plans to invite the experts back to demonstrate their tools and capabilities for identifying and preventing healthcare fraud, waste, and abuse, as well as recovering improper payments.

Additionally, the VA-CMS partnership will bring program integrity policies that have successfully prevented healthcare fraud for CMS to veteran healthcare programs.

As part of its effort to focus on preventing fraud, waste, and abuse, CMS established the Center for Program Integrity in 2010. Program integrity activities saved Medicare alone about $17 billion by 2015.

The savings primarily stemmed from the center preventing improper payments through systemic edits, provider enrollment actions, pre-payment reviews, and provider suspensions, which saved $14.4 billion.

Recovery of overpayments accounted for the remaining $2.6 billion in savings. Post-payment recovery activities include reviews and audits, Recovery Audit Contractor services, and law enforcement referrals.

The VA expects to “close existing gaps in its own claims payment process” by leveraging and building on the successes of CMS program integrity protocols.

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