Verizon, alongside Northrop Grumman and WellPoint subsidiary National Government Services, has helped develop a technology for the Centers for Medicare & Medicaid Services that improves detection and prevention of fraud and waste.

The new platform incorporates predictive modeling technology from Verizon to transform the way Medicare fraud is detected, and officials say it will provide CMS with a scalable and automated solution that scrutinizes incoming Medicare program claims, routing those that may be fraudulent to case managers for investigation.

[See also: Verizon launches healthcare solutions business, data security services.]

Susan Zeleniak, group president of Verizon Federal, says the technology – a customized version of the software platform Verizon uses for its own fraud detection programs – has its roots in a 60 Minutes TV segment about CMS' efforts to prevent millions of dollars being paid out inappropriately.

"Some of the engineers saw this, and went to work developing an algorithm that would allow them to use our internal fraud detection…  to actually be applied to solving the Medicare problem," she says. "We did a pilot with the Centers for Medicare & Medicaid Services, and it was quite successful."

In just one week it identified millions of dollars of potential chicanery – all of which was subsequently verified by CMS to indeed be fraudulent claims.

The fraud-detection solution, which is part of CMS’ National Fraud Prevention Program, seeks to flag fraud before payments are made – reducing both improper payments and the cost and time involved with traditional "pay-and-chase" recovery.

[See also: Northrop Grumman introduces national health data repository .]

Predictive modeling, which is commonly used in the financial and telecom sectors to fight fraud, uses advanced analytics – including link, behavioral and statistical analysis – to monitor volumes of information in near-real-time to help to identify potentially fraudulent requests prior to processing. 

"We're able to identify interesting behavior patterns," says Mary Ludden, director of program integrity at National Government Services, and "look at those interesting behaviors the earliest we've ever been able to see them in the lifecycle of the claim. I've been in Medicare for a long time in the trenches. This has never been achieved before. It really is groundbreaking by these three teams."

In addition to Verizon's technology, Northrop Grumman will provide overall program management and contract oversight for the technology and National Government Services will provide Medicare fee-for-service expertise, development of algorithms for fraud prevention and hosting of information technology and infrastructure.

Amy Caro, vice president of health IT programs at Northrop Grumman, calls it "an absolute winning team to deliver what CMS needs for the future."

Zeleniak sees the collaboration as part of a trend where "federal agencies are increasingly using private sector tools to solve public sector issues.”

She says she's seeing "more of a back and forth between commercial and government – in both directions – on what are best practices. I think this is a great example of that, and hopefully we'll see more."

Indeed, "we also have some [other] government clients talking to us about this," says Zeleniak. "I definitely think there are other applications for this type of technology."

"With the tighter budgets and the shorter schedule, I think you'll see the government embracing more solutions from other verticals," adds Caro. "They're more open to collaboration, sharing of ideas and utilizing tools and techniques from other markets."