The Centers for Medicare and Medicaid Services (CMS) has embarked upon a massive data gathering, data mining, and data matching program. While this program has been operating virtually under the radar, providers should be aware that Big Brother sees all and knows all.

On June 30, 2011, CMS’ Fraud Prevention System (“FPS”) started pre-payment screening of all Medicare fee-for-service claims -- 4.5 million per day according to CMS. Am.Health Lawyers Assn., Roundtable Discussion: A Conversation with Dr. Peter Budetti. These claims are being monitored and analyzed using "sophisticated algorithms and models to identify suspicious behavior." CMS Center for Program Integrity, New Strategic Direction and Key Antifraud Activities. In addition, CMS is using historic data and external databases, together with the information extracted from claims, to build, in CMS’ words, "robust" profiles of providers and suppliers. Any "unusual billing patterns” are used to determine “the likelihood of fraudulent activity." The results are provided to Zone Program Integrity Contractors (ZPICs) and, if warranted, to law enforcement personnel. ZPICs can initiate investigations, with or without prior notice. They are authorized to use statistical sampling and extrapolation, which can serve as the basis for suspending all payments payments pending the completion of an investigation. Simply put, the denial of claims is the best bad outcome a provider can hope for.

Another under the radar data gathering system is Automated Provider Screening (APS), which was implemented on December 31, 2011. APS is a provider enrollment screening tool that automatically cross checks the information on Medicare enrollment applications against thousands of public and private databanks to verify and supplement the information on the application. The APS will also routinely rescreen provider information for continued accuracy to ensure a provider’s continued eligibility, and will use all available data for the ongoing monitoring of all existing providers.

CMS will share all of the information it collects with states, law enforcement agencies, and private insurance plans.  For more details see National Fraud Prevention System Means More Audits, Screening and Collection of Provider Data.