Predictive analytics saves government $1.5B in improper payments

The federal government saved more than $1 billion over the last two years through its Fraud Prevention System (FPS), bringing the total savings to $1.5 billion since the program was launched in 2011, according to a Centers for Medicare & Medicaid Services (CMS) blog post.

CMS officials cite examples of improper claims identified by FPS submitted by a home health provider in Florida, an ambulance company in Texas and a medical clinic in Arizona. In each case, predictive analytics allowed officials to quickly investigate the claims and suspend or revoke the provider's enrollment.

CMS reported an $11.60 return on investment for every dollar spent on FPS in 2015, which has helped the agency move beyond the traditional "pay and chase" approach to fraud enforcement and toward a more preventive model. CMS also indicated it is "working to develop next-generation predictive analytics with a new system design that even further improves the usability and efficiency of the FPS."

Last year, CMS said it identified or prevented $454 million in fraudulent claims in 2014, but a subsequent report from the Office of Inspector General reported the FPS had saved a little more than $133 million, a $2.84 return for every dollar spent, reigniting concerns about how the agency reports savings associated with its analytics program. Although CMS has been using FPS since 2011, some have criticized the agency for failing to use the full weight of predictive analytics out of fear of provider backlash.

To learn more:
- here's the CMS blog post

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