CMS Cracks Down on Healthcare Fraud with New “Fraud War Room”
There has been a lot going on regarding healthcare fraud, waste, and abuse, and the Centers for Medicare & Medicaid Services (CMS) is stepping up against it. Just this week, CMS launched a new unit called the Fraud Detection Operation Center (FDOC). This is a high-tech “war room” where experts are working in real time to stop scammers before taxpayer money is lost. A CMS spokesperson reassured, “We’re not just chasing fraud anymore,” and added, “We’re stopping it in its tracks.”
What is FDOC?
FDOC is more of a command center, bringing together fraud investigators, technology experts, and data analysts. Their main aim is to catch suspicious behaviour at the earliest. For example, CMS halted payments to a doctor who had been dead for 20 years. And in another example, they removed 18 providers who had been convicted of serious crimes. The FDOC has also contributed towards uncovering false billing for wound care services and reviewed any doubtful hospice claims.
In addition, the FDOC works with the Fraud Prevention System (FPS), and this is powered by artificial intelligence (AI). The system automatically flags any strange behaviors, such as a provider billing too much or too often, and immediately shows it to the investigators. Its operations have been perfectly explained by Lauren Toth, a technical director at Peraton (the company behind FPS): “Imagine a provider bills $800,000 for one medical code, and their patients live 95 miles away,” said Toth, “That’s a red flag.”
The case mentioned by Toth is actually what happened in one case. Investigators immediately spotted the patterns, halted payments, and opened an investigation. “In the past, we paid first and then chased fraud later,” said Toth. “Now, we can pause the payment before it’s made.”
This isn’t just all talk. Since March 2024, CMS has already suspended $43 million in payments to 33 providers due to growing fraud concerns. And they’re not stopping for a thing, as said by the CMS spokesperson, “We expect many more success stories.”
Rapid FI
Another excellent innovation by Peraton is a new product called Rapid Fraud Intelligence (Rapid FI). This is tailored to urgent needs, as it is designed to be faster and easier for federal agencies to use. Even though it is not put to use as of yet, it may be used in the future for similar purposes.
Rapid FI enables investigators to view any suspicious activity on a user-friendly dashboard. By comparing providers, flagging risk scores, and even using social network analysis to look for signs of kickbacks, Rapid FI is slowly paving its way into the project.
The senior software developer at Peraton, Allen Barger, demonstrated the tool and said, “Here’s a chiropractor billing like crazy,” and added, “His 32 patients all live nearly 100 miles away. That’s a red flag.” The system is great for saving time, effort, and money, as it is specifically built to help investigators to decide whether or not to launch a full investigation.
What’s Next?
CMS is adamant on stopping fraud before it even starts, and this might include bigger policy changes. This includes closing loopholes in Medicare Advantage appeals, ending certain Medicaid funding matches, and cutting back on ACA program spending. “We want to protect every taxpayer dollar,” said Toth. “And the right technology helps us do that.”
