Sebelius and Holder announce new tools to prevent and fight fraud at Boston regional health care fraud prevention summit

BOSTON--(BUSINESS WIRE)-- As part of the Obama Administration’s ongoing efforts to prevent and fight fraud in our nation’s health care system, U.S. Department of Health and Human Services Secretary Sebelius and Attorney General Eric Holder today announced that the Centers for Medicare and Medicaid Services would be acquiring some new state-of-the-art fraud fighting analytic tools to prevent wasteful and fraudulent payments in Medicare, Medicaid and the Children’s Health Insurance Program.

Sebelius and Holder made the announcement at the University of Massachusetts, Boston at the fourth regional health care fraud prevention summit. The Attorney General and the HHS Secretary have crisscrossed the country this year bringing together a wide array of federal, state and local partners, beneficiaries, and providers to discuss innovative ways to eliminate fraud within the U.S. health care system.

“This has been a remarkable year for cracking down on health care fraud – and our success has been built on initiatives like these combining the experience and insight of our law enforcement teams with new resources and cutting-edge technology,” said Secretary Sebelius. “Thanks to the new tools and resources provided under the Affordable Care Act, we are more effective at going after the fraudsters that are stealing taxpayer dollars.”

“Here in Boston and in communities across the country, health care fraud schemes are being aggressively and permanently shut down. The District of Massachusetts, with U.S. Attorney Carmen Ortiz at its helm, has recovered more than $4 billion in civil and criminal health-care fraud settlements over the past two years," said Attorney General Eric Holder. "These actions are in large part because of the great work being led by Health Care Fraud Prevention and Enforcement Action Team. Through this initiative, we are working in partnership with government, law enforcement and industry leaders to protect taxpayer dollars, control health care costs, and ensure the strength and integrity of our most essential health care programs. Simply put, we have taken our fight against health case fraud to a new level, and I am committed to continued collaboration, vigilance, and progress.”

As part of today’s Summit, CMS will issue today a solicitation for state-of-the-art fraud fighting analytic tools to help the agency predict and prevent potentially wasteful, abusive or fraudulent payments before they occur. These tools will integrate many of the Agency’s pilot programs into the National Fraud Prevention Program and complement the work of the joint HHS and Department of Justice Health Care Fraud Prevention and Enforcement Action Team (HEAT).

“Preventing fraud is more effective than the old ‘pay and chase’ model of fighting fraud after a sham provider has been paid and disappeared,” said CMS Administrator Donald Berwick, M.D. “By using new predictive modeling analytic tools we are better able to expand our efforts to save the millions – and possibly billions – of dollars wasted on waste, fraud and abuse.”

Predictive modeling tools are used by banks, credit card companies, insurance and other consumer companies to identify potential fraud before it occurs. CMS is actively exploring using similar systems to identify background information on potential fraudulent actors and links to questionable affiliations. This type of new information will help prevent bad actors from enrolling as health care providers or suppliers for the sole purpose of defrauding the health care system. Other tools will track billing patterns and other information to identify real-time aberrant trends that are indicative of fraud.

CMS, like other healthcare payers, will use the results to take anti-fraud actions before a claim is paid. CMS is already starting to take administrative action to stop payments to “false fronts” in Texas identified through sophisticated predictive modeling. In addition, CMS is implementing new and expanded authority provided in the Affordable Care Act to take such actions, including suspending payments when investigating a credible allegation of fraud.

“Using the most up-to-date technologies and adopting best practices across the nation’s health care system, we have a better chance of finding fraudulent and abusive providers before they even start billing Medicare or other health insurance,” said Peter Budetti, M.D., director of CMS’ Center for Program Integrity.

Many companies in the private sector, as well as CMS, have been testing and using predictive modeling programs to help identify possible fraudulent providers and scams based on historical information about the individual or the company in which the individual is affiliated.

In one pilot program, CMS partnered with the Federal Recovery Accountability and Transparency Board (RATB) to investigate a group of high-risk providers. By linking public data (information found by anyone on the Internet) with other information like fraud alerts from other payers and existing court records, a sophisticated, potentially fraudulent, scheme was uncovered. The scheme involved opening multiple companies at the same location on the same day using provider numbers of physicians in other states. The data confirmed several suspect providers who were already under investigation and, through linkage analysis, identified affiliated providers who are now also under investigation.

In addition to remarks by the Secretary and the Attorney General and the announcement about the new technology coming to Medicare and Medicaid, the summit featured four educational panels aimed at identifying best practices for providers, law enforcement, and beneficiaries in preventing health care fraud.

The recently enacted Affordable Care Act provides additional tools and resources to fight fraud in the health care system by providing an additional $350 million over the next ten years through the Health Care Fraud and Abuse Control Account. The Act toughens sentencing for criminal activity, enhances screenings and enrollment requirements, encourages increased sharing of data across government, expands overpayment recovery efforts, and provides greater oversight of private insurance abuses. For information on the 2009 Health Care Fraud and Abuse Control Program Report, please visit:

Investments in fraud detection and enforcement pay for themselves many times over, and the Administration’s tough stance against fraud is already yielding results. In FY 2009, anti-fraud efforts put $2.51 billion back in the Medicare Trust Fund resulting from civil recoveries, fines in criminal matters, and administrative recoveries. This was a $569 million, or 29 percent, increase over FY 2008. In FY 2009, more than $441 million in federal Medicaid money was returned to the Treasury, a 28 percent increase from FY 2008. Most recently, in FY 2010, the Department of Justice obtained settlements and judgments of more than $2.5 billion in False Claims Act matters alleging health care fraud. This is more than ever before obtained in a single year, up from $1.68 billion in FY2009.

The summits are part of the overall joint health care fraud fighting effort undertaken jointly by the Department of Justice and the Department of Health and Human Services through the Health Care Fraud Prevention and Enforcement Action Team (HEAT). As one part of HEAT’s efforts, Medicare Fraud Strike Force operations have expanded from South Florida and Los Angeles to a total of seven health care fraud hot spots including Houston, Texas; Detroit, Mich.; Brooklyn, N.Y.; Baton Rouge, La.; and Tampa, Fla. The Strike Force is a partnership between the Criminal Division’s Fraud Section, U.S. Attorneys’ Offices, HHS’ Office of Inspector General, FBI, and other federal, state and local law enforcement partners. Since their inception in March 2007, Medicare Fraud Strike Force operations have obtained indictments of more than 850 individuals who collectively have falsely billed the Medicare program for more than $2.1 billion.

On June 8, 2010, President Obama announced this nationwide series of regional fraud prevention summits as part of a multi-faceted effort to crack down on health care fraud. The Boston summit was the fourth in a series, with additional summits to follow in the coming months in Detroit, Boston, Philadelphia and Las Vegas. Previous summits were held in Brooklyn (November 5, 2010), Miami (July 16, 2010) and Los Angeles (August 26, 2010).

Note: All HHS press releases, fact sheets and other press materials are available at


CMS Press Office

KEYWORDS:   United States  North America  District of Columbia  Massachusetts

INDUSTRY KEYWORDS:   Health  Public Policy/Government  Healthcare Reform  Law Enforcement/Emergency Services  Public Policy  White House/Federal Government  Professional Services  Insurance  General Health  Managed Care