The Centers for Medicare & Medicaid Services (CMS) has released a report announcing that their efforts to reduce fraud in the system has saved $42 billion of tax payers’ dollars in two years for the Medicaid and Medicare Program.

Background of CMS

CMS has an ongoing goal to improve the quality of care to those using Medicare and Medicaid as well as reducing the cost of health care. To do this, CMS is constantly striving to improve the Medicaid and Medicare Program by cutting fraud and putting more of taxpayers’ dollars back in their pockets. Reducing fraud and cutting frivolous spending in the system also helps improve the service Medicare provides and reduces how much enrollees have to pay for out of pocket health care costs.

Medicaid and Medicare Program Savings Goals

For the Fiscal Year 2013 and 2014, CMS wanted to attack fraud and reduce spending in the Medicare Program. They approached this challenge from multiple angles to find the best way to remove fraud and reduce improper payments. This included:

• Use of advanced analytics, including predictive modeling, to prevent fraud, abuse, and waste of money
• Increasing the provider enrollment and screening standards
• Utilizing enforcement authorities, including federal and external partners, when fraud and improper payments did occur to deter future efforts

In addition to this strategy, CMS also discarded the previous “pay-and-chase” method of recovering improper payments for beneficiaries and enrollees. Instead, CMS prevented improper payments from the start so there was no need to recover the amounts already paid. All of these efforts were coordinated by CMS with the help of contractors, state Medicaid agencies, and law enforcement partners.

Results and Benefits

Starting on October 1, 2012 and running through September 30 of 2014, CMS’ efforts results in an outstanding savings. For this time period, CMS helped save $42 billion from the Medicaid and Medicare Program. To break it down, this means every dollar invested in Medicare program integrity generated an average savings of $12.40! A lot of these savings came from abandoning the “pay-and-chase” method and focusing on early prevention. In the first fiscal year, prevention activities accounted for 68% of the total savings from that year. The second fiscal year increased with 74% of the total savings from prevention activities.

What does this all mean to you? Reducing fraud and preventing you from making an unneeded health care payment creates a better Medicare program. You will spend less money on out of pocket costs and you will see an improvement in the quality of care you receive as part of your Medicare program. Likewise, saving money every year by reducing waste and abuse allows the Medicare program to live longer, providing care to seniors and low income families to keep the nation healthy.

To learn more about the savings and the Medicare program CMS implemented, check out the CMS Blog.