Effective Jun. 2011, the Centers for Medicare & Medicaid Services (CMS) implemented a predictive analytics system to analyze Medicare Fee for Service claims.  The system, which was mandated in the Small Business Jobs Act of 2010 (SBJA), is designed to detect and flag potentially fraudulent claims in real time.

CMS has compared the new system to pre-payment analyses performed by the financial and credit care industries.  Claims are streamed through the predictive modeling technology as they are submitted.  Based on the data in the claims, the system builds profiles of providers, networks, billing patterns and beneficiary utilization.  Based on these profiles, CMS can create estimates of fraud and flag potentially fraudulent claims.

Though the predictive modeling system is designed to identify potential fraud, claims are not being denied exclusively based on alerts generated by the system at this time.  CMS will continue to develop and refine the algorithms used to screen claims.  For more information about the new system, please review a recently published Medicare Learning Network article.

Coding Corner articles are archived on the Coding Page of the AASM website for future reference.