IPF on Forbes: Fight Medicare Fraud Like Credit Card Companies

Over at Forbes.com you’ll find a high-level summary of the current state of the battle over Recovery Audit Contractors (RACs).

While most healthcare providers are abreast of the latest developments, you may have missed a recent article that offers a simple premise: Instead of chasing Medicare cheats after-the-fact, as the RAC program does, the Centers for Medicare and Medicaid Services (CMS) should put more money into catching them up front.

As Marco Huesch and Robert J. Szczerba  write in a recent article on the Health Affairs Blog, CMS’s integrity program can eliminate more fraud and waste by becoming even more like credit card companies, which have become effective at sniffing out fraud at the transaction level.”CMS has increasingly turned to algorithmic-based approaches pioneered and proven in consumer financial services,” according to the authors.

“CMS has increasingly turned to algorithmic-based approaches pioneered and proven in consumer financial services,” they write. “Consider fraud vulnerability when commercial banks facilitate consumer credit and merchant payments through credit cards. Best-practice solutions include Fair Isaac (FICO) risk-scoring to preemptively identify those merchants, customers, and transactions that present a statistically higher risk of fraud, and preventing a detected potential fraud before or soon after a payment is made. Such fraud-control programs in consumer banking have reduced losses by more than two-thirds over twenty years despite more sophisticated and more global fraud activities.”

The authors believe  CMS will move even further in this direction. “Overall, a proactive approach championed by CMS’s new director of the Center for Program Integrity seeks to shift the agency from trying to recoup improper payments and prosecuting criminals to not making such payments in the first place,” they write.