Health care providers have known for some time that the government intended to adopt a predictive modeling data analysis system to supplement its Medicare fraud fighting efforts.1 And on Friday, June 17th, the Centers for Medicare & Medicaid Services (CMS) of the Department of Health and Human Services (HHS) announced that through a competitive bidding process, Northrop Grumman had been selected to develop and implement CMS’s national predictive modeling technology format for Medicare data, utilizing the best practices of both public and private stakeholders.

CMS plans to begin using the technology on July 1, 2011. Northrup Grumman will partner with two other government information systems analysis contractors National Government Services and Federal Network Systems, LLC—to analyze CMS claims by beneficiary, provider, service origin, and/or other identifying information. The technology is based upon that used by credit card companies to identify fraudulent practices early. By identifying what appear to be aberrant billing and claims patterns, these contractors will assign “risk scores” to questionable claims and potentially stop reimbursements from being issued to the providers that submitted them. Through an as-of-yet unspecified process, CMS plans to use this information to determine which claims merit further investigation or enforcement action. “CMS has worked with public and private stakeholders throughout the process of developing this program, and the key insight they shared on their successes and innovations have helped ensure it will significantly help us address fraud in the Medicare program,” said Peter Budetti, M.D, J.D., director of CMS’s Center for Program Integrity (CPI).2