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CMS selects Northrop Grumman to implement fraud prevention system

The Centers for Medicare & Medicaid Services (CMS) has selected defense contractor Northrop Grumman to develop and implement a fraud prevention system to help identify high-risk claims in support of the National Fraud Prevention Program. The program's mission is to prevent and detect fraud, waste, abuse and other improper payments under the Medicare program.

The Predictive Modeling Development task order -  valued at $77 million over one year with three, one-year option periods - was awarded under the CMS Enterprise System Development indefinite delivery, indefinite quantity contract. 

[See also: Healthcare company owner pleads guilty to Medicare fraud]

The vision of the National Fraud Prevention Program is to implement proven predictive modeling tools into the claims processing system to stop payment on high-risk claims. Predictive modeling is a combination of advanced analytic techniques, including predictive analytics, linkage analysis, outlier analysis, network analysis, behavioral analysis and other statistical techniques. 

"This critical program will help prevent the misuse of taxpayer dollars that can result from waste, fraud and abuse of the Medicare program, which will in turn decrease healthcare costs," said Amy Caro, Northrop Grumman's vice president of health information technology programs. "Our uniquely qualified team will implement proven solutions and industry best practices that will help prevent fraudulent transactions before they occur, rather than identify fraudulent activity after the fact."

Northrop Grumman will implement predictive modeling and other analytic technology systems capable of reporting alerts based on risk scoring applied to near real-time claims beginning July 1, 2011.