Fraud Detection – CMS Changes Direction

Recently, the Centers for Medicare & Medicaid Services (“CMS”) released a process change in its fraud detection program shifting focus to providers who have the highest claim error rates or billing practices that vary significantly from their peers. In the past, CMS contractors selected providers using a more random approach making all providers subject to audit – not just the outliers.

How will CMS identify Outlier Providers? Data analysis. Medicare Administrative Contractors (“MAC”) will be assessing data to identify outlier providers as compared against their peers. If a provider is selected for audit, the MAC will conduct a probe sample of 20-40 claims per provider. Depending on the outcome of that audit, the provider will either receive education and be subject to additional audits or remain off the MAC’s radar for up to 12 months. For a detailed flowchart of the process, go to

Know your data! Understanding your claims data is essential. Providers want to ensure they are implementing and using compliant practices to reduce the chance of being an outlier and therefore spending significant time and effort responding to a MAC audit.

Prepare now and stay off the government’s radar.

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