New CMS tools help to save up to $120 billion

Thursday - 5/26/2011, 9:41am EDT

Jon Blum, Deputy Administrator and Director of the Center for Medicare, Centers for Medicare and Medicaid Services

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By Suzanne Kubota
Senior Internet Editor
FederalNewsRadio.com

The Centers for Medicare and Medicaid Services says it can save $120 billion dollars over the next five years.

It says the savings will come from improvements to the Medicare program - including new tools to fight waste, fraud and abuse, reforming payment systems, and expanding the use of electronic health records.

On top of all that, Jon Blum, deputy administrator and director of the Center for Medicare (CMS), credits one more tool for big savings. He told Federal News Radio CMS is "doing much more work with data and predictive analysis to ensure that we screen out bad actors, that we ensure that our payments are accurate, and just through better management, better data, we are saving billions of dollars."

The use of predictive analytics, said Blum, took a real shift in thinking on the part of CMS.

"Well, I think historically, the program has relied on a pay and chase process. We pay the claim, then after the fact, we would go after the claim if it was paid incorrectly. I think what we're trying to do is to change the focus and to change the orientation, provide a lot more up front investment to our analytics to predict which payments, which providers, would be paid incorrectly or potentially fraudulently."

But CMS feds aren't the only ones making changes. Blum said working with the public to fight fraud means re-education will be needed on both sides.

"Our goal is to ensure that physicians and hospitals have better tools to coordinate care and to provide more efficient care, more safer care. We know that when we reduce medical errors, there are tremendous savings to the system, but part of the challenge is to ensure that 45 million beneficiaries understand what benefits they have," said Blum.