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Center for Regulatory Effectiveness

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CMS' Electronic Watchdog
A senior HHS official told the Senate that provision of durable medical equipment "is an industry that has historically high risk for fraud." The Department's leadership also testified that "continuous positive airway pressure (CPAP) devices, oxygen equipment, glucose monitors and test strips, and power wheelchairs...are the most lucrative items for suppliers and thus, at the greatest risk of fraud."

HHS leadership emphasized to the Senate the importance of CMS' advanced data analysis techniques in assisting law enforcement authorities in combating fraud.

The official testified that "CMS is currently in the final stages of building an integrated data repository (IDR) which will for the first time in Medicare's history bring all Medicare claims data together in one centralized data repository. Using the IDR, CMS will go beyond the current practices of application and claims review by using sophisticated new technology to identify aberrations in claims data, such as unusual, clinically inconsistent, or high volume billings."

The Department's anti-fraud efforts also include "training FBI and OIG agents and local law enforcement personnel on methods of investigation." Moreover, the agency is "investing in data analysts, to identify patterns of fraud so that we can target our efforts for maximum effectiveness.

The electronic watchdog efforts are already showing results. A senior CMS official stated, "I would say it's changing the game substantially. The better view of what's going on in Florida allowed the CMS to reject bogus claims worth more than $1.5 billion as of May. Before we even let the money out the door, we stop it from getting paid."

Fighting fraud through sophisticated data analysis and other crime-fighting techniques is essential for protecting taxpayers and Medicare beneficiaries. What does not contribute to curbing fraud and strengthening Medicare, however, is reducing the number of qualified, law abiding DME suppliers who provide beneficiaries with quality equipment and service.

See CRE Competitive Bidding Discussion Forum

See HHS Senate Testimony

See Modern Health Care article

See DOTmed article

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