CMS is Making Strides in Fighting Waste, Fraud and Abuse

Published: August 26, 2015

Big DataHHSHealth CareHealth ITWaste, Fraud, and Abuse

According to Dr. Shantanu Agrawal, Deputy Administrator & Director of the Center for Program Integrity at CMS, CMS recovered $4.3b attributed to waste, fraud and abuse in 2013.

CMS’ Center for Program Integrity is at the heart of curtailing waste, fraud and abuse within the Medicare and Medicaid programs. They are tasked with promoting program integrity through audits and policy reviews, identification and monitoring of program vulnerabilities, and providing support and assistance to states.


Federal News Radio recently interviewed CMS’ Center of Program Integrity Director, Dr. Agrawal who discussed his office’s mission, priorities, accomplishments and challenges.


The federal government spent $3.1 trillion on health care in 2014, according to Dr. Agrawal. Medicare accounted for $635 billion. Medicare and Medicaid programs account for 40% of national health care expenditures.


The Affordable Care Act (ACA) prescribed a CMS move from volume-driven health care to one the prioritizes value. The Center for Program Integrity started before ACA, but the health care legislation gave the Center more authority. The Center has an extensive mission and is slotted for 350 full time employees with a budget of $1 billion, according to Dr. Agrawal.


According to Dr. Agrawal, “There is a lot of agreement that a significant portion of health care spending, 30-40%, is wasteful and not valuable.” The current fee for service model within Medicare and Medicaid today incentives providers to do more, to provide more services. Sometimes these services include unnecessary tests, screenings, etc. “Incentives are misaligned in the way we pay for care. And additionally, there are criminal elements,” said Dr. Agrawal. Leakage in the system occurs at a lot of different levels and some is waste. The Center tries to address the full spectrum of waste and fraud. They use different approaches for different concerns, for example, education, outreach, payment systems, etc.


Dr. Agrawal’s top challenges stem from an environment of very large systems and volume. Medicare is a massive system that pays out $1b per day. The magnitude is important to keep in mind and takes a large amount of coordination across CMS.


· Challenge #1 is achieving coordination across the organization. A lot of tools exist across CMS to combat waste, fraud and abuse, but coordination is necessary. Even policy tools can be used to lower spending and costs.


· Challenge #2 is prioritizing across such a large system.


· Challenge #3 is once the vulnerabilities are identified, are the right tools being used for the job and is the job being done in a way that doesn’t overburden the legitimate providers. There must be a balance.


Dr. Agrawal described improper payments as payments that should not be paid, to include those that stem from fraudulent claims. According to Agrawal, the vast majority, 60%, of improper payments stem from documentation problems. The paperwork isn’t right. Providers are historically more concerned with patient care than documentation. Incomplete or inaccurate paperwork doesn’t necessarily mean fraud or a service not given. “Truly fraudulent providers are actually really good a documentation, because that’s all they do. They don’t see patients.” said Agrawal.


Dr. Agrawal outlined his strategic priorities as follows:


· Coordination – within CMS and with providers, and across Medicare and Medicaid. CMS is developing public private partnerships so they can connect to close vulnerability gaps across all of health care.


· Analytics – Further implementation of real-time analytic systems to spot claims that are outliers. CMS will continue to invest more in order to deny claims, or investigate those that should be audited further.


· Provider Screening – They are being selective about the providers that they choose to do business with. They are screening and rescreening providers. ACA gave them some tools for provider screening. Since their implementation they have disenrolled 500,000 providers due to issues such as proper licensing.


· Timely and Efficient Action – They need to focus on the right vulnerabilities and take quick action. The Center must address the entire spectrum of issues causing waste, fraud and abuse.


CMS is making great strides in heading off waste fraud and abuse with many of the initiatives described. As part of its effort to use analytics to prevent payments for fraudulent claims, CMS launched the Fraud Prevention System nearly four years ago. The FPS identifies $5 in savings for every dollar spent on the system, according to Dr. Agrawal. The FPS enables CMS to move away from a “pay and chase” mode of operations to one of prevention. The system uses predictive analytics to screen claims and assign risk scoring, which allows CMS to prevent potentially fraudulent claims from being paid until further investigation can be conducted.


Other initiatives underway at the Center include coordination with states for shared education and training. Medicaid is administered by the states, so CMS provides program integrity training for states through the Medicaid Integrity Institute.

Dr. Agrawal believes that payment policy innovation will help drive out waste in the system. It also brings providers into the discussion. He believes a shift from “pay for service” to “pay for outcomes” will help them move away from fee for service which incentivizes providers to just do more. “Paying for outcomes places more financial risk on the provider side of the house. It will require