CMS Has Failed to Update Congress On Predictive Modeling Progress, GAO Says

  BNA’s Health Care Fraud Report™ is the go-to source for health care fraud reporting, with in-depth information on government and private enforcement actions and strategies designed to...

The Centers for Medicare & Medicaid Services has not defined or measured the benefits and performance of its predictive modeling program, also known as the Fraud Prevention System (FPS), and has missed the deadline for submitting a report on the program to Congress, according to a Government Accountability Office report issued Nov. 15.

“With regard to FPS, CMS had not yet defined an approach for quantifying the financial benefits expected from the use of the system,” GAO said in its report, CMS Has Implemented a Predictive Analytics System, but Needs to Define Measures to Determine Its Effectiveness (GAO-13-104).

GAO said officials from the Center for Program Integrity within CMS stated that they had “not yet determined how to quantify and measure financial benefits from the system, but that they intend to do so in the future.”

A bipartisan group of senators has made repeated requests to CMS for performance metrics associated with the FPS, including a December 2011 letter from Sens. Thomas R. Carper (D-Del.), Scott Brown (R-Mass.), and Tom Coburn (R-Okla.) expressing concern over the lack of performance metrics surrounding the FPS (16 HFRA 15, 1/11/12).

The GAO report was conducted at the request of Carper, Brown, and Coburn.

Carper and Brown are chairman and ranking member, respectively, on the Senate Homeland Security and Governmental Affairs Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security; Coburn is a subcommittee member.

The FPS also has not been integrated with CMS claims payment systems, GAO said, and although CMS officials said they expect to complete the integration by January 2013, “program officials had not yet defined detailed schedules for completing the associated tasks required to carry this out,” the report said.

The FPS, which was launched July 1, 2011, uses predictive modeling and data analytics to review all Medicare fee-for-service claims for indications of fraud.

Missing Progress Reports.

Additionally, the report said CMS has missed the deadline for issuing a statutorily mandated report to Congress on the progress of the FPS and has failed to provide an updated report on FPS performance measurements to the Office of Management and Budget.

The congressional report was due by Sept. 30, GAO said.

Coburn and Senate Finance Committee ranking member Orrin G. Hatch (R-Utah) sent a letter to CMS Oct. 15 requesting the immediate release of the congressional report (16 HFRA 803, 10/17/12).

Hatch and Coburn had sent an initial letter to CMS in July requesting information on the predictive modeling program. CMS responded, but did not provide detailed information, according to Hatch and Coburn.

As for OMB, CMS reported initial performance measurements and targets in September 2011 and said it would submit a new report in June 2012, but has so far failed to do so. OMB requires government agencies to provide progress reports on information technology programs, such as the FPS.

Implementing Predictive Modeling.

While the report noted the absence of performance measurements and progress reports, it did say that the FPS is being used to detect suspicious billing patterns and that 10 percent of all Zone Program Integrity Contractor (ZPIC) investigations have been started because of a lead from the FPS.

ZPICs also told GAO the FPS has helped them verify investigative leads from other sources and has improved the speed of investigations.

For example, “using FPS's near-real-time claims data, some investigators reported identifying and conducting interviews with beneficiaries shortly after they received services from providers under investigation, when beneficiaries can better recall details about their care,” the report said.

ZPICs are responsible for identifying and investigation Medicare fraud.

However, ZPICs also said the FPS “has not fundamentally changed the way in which they investigate fraud.”

ZPICs identified some problems with the FPS, including:

• requiring the investigation of leads generated from the FPS. ZPICs said that has taken away time and resources from existing investigations;

• increasing the workload for ZPICs; and

• having to investigate false positives. ZPICs said some FPS models resulted in high levels of false positives.


CMS said it is has taken steps to address the problems raised by the ZPICs, the report said.

GAO Recommendations.

GAO recommended that the secretary of health and human services require CMS to “define quantifiable benefits” expected to accrue from the FPS as well as create performance targets and milestones to be used in measuring the success of the FPS.

CMS should also develop a schedule for when it expects to integrate the FPS with claims payment systems and should review the FPS to determine if it is providing expected financial benefits, GAO said.

HHS agreed with all of the GAO recommendations and said CMS is in the process of implementing them. For example, HHS said CMS has defined the benefits of the FPS and will include them in its report to Congress. CMS has developed a schedule for integrating the FPS with claims payment systems, HHS said.

Congressional Reaction.

In a statement Nov. 15, Carper said the GAO report demonstrated that “the new system's preventative abilities are not yet fully deployed, making proper detection and prevention more challenging than it needs to be.”

Brown and Coburn also made statements Nov. 15 on the GAO report, raising concerns over the lack of performance measurements in the FPS.

“It's troubling CMS has no metrics, timeframes, measures or other indicators in place to assess the program's effectiveness,” Coburn said.

Brown said the GAO report indicated “that the Centers for Medicare and Medicaid has fallen short of the Congressional requirement to prevent fraudulent Medicare payments before they are made, as opposed to having to chase down crooks after the money has gone out the door.”

By James Swann  

The GAO report is at