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CMS saved $42B by preventing fraud and improper payment

July 21, 2016
by Nicole Stempak, Senior Editor
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Investing in program integrity has a big pay off for taxpayers and Medicare and Medicaid beneficiaries, according to a new report.

The Centers for Medicare & Medicaid Services (CMS) saved $42 billion through reduction of fraudulent and improper payments alone. For fiscal years (FY) 2013 and 2014, CMS saved an average of $12.40 for each dollar spent on Medicare program integrity alone.

What's more, the money saved can go toward what it was originally indented to be used for: providing needed healthcare to Medicare, Medicaid and Children's Health Insurance Program beneficiaries.

"This means that all our efforts--making sure healthcare providers enrolled in our programs are properly screened; using predictive analytics to prevent fraud, waste, and abuse; and coordinating our anti-fraud efforts with our federal and external partners--have resulted in billions of dollars saved in Medicare and Medicaid over the two-year period," writes Shantanu Agrawal, MD, deputy administrator and director for the Center for Program Integrity on The CMS Blog.

CMS's efforts have shifted from the "pay-and-chase" method of recovering dispersed payments to proactively preventing potential fraud and improper payments from being paid in the first place. Prevention activities represented about 68 percent of total savings in FY 2013 and grew to nearly 74 percent in FY 2014. FY 2015 findings will be released later this year but already preliminary information shows savings are expected to increase.