New data center, warehouse to help CMS reduce improper payments

Physicians who bilk Medicare on medical claims may not be able to hide much longer among the system stovepipes of the Centers for Medicare and Medicaid Services.

Officials are modernizing CMS’ data collection and storage systems, hoping to bring down the agency’s soaring rate of improper payments and reduce waste, fraud and abuse.

Medicare accounts for $21.7 billion of the annual $45 billion in improper payments governmentwide.

The enterprise data center and warehouse are designed to collect and store more, higher-quality data in a unified repository to meet the demands of the new Medicare prescription drug plan, accelerated Medicare claims processing and more use of Internet-based applications.

“All the business lines at CMS, like Medicare benefits, hospital quality and pay for performance, will benefit from the data warehouse, easy access and manipulation of data,” said Tim Hill, director and chief financial officer in CMS’ Office of Financial Management.

Most data center operations that support claims processing now are stovepiped for a specific application or business process or are not under CMS’ direct control. CMS will fold its 22 separate data centers into four, separated geographically but acting as one enterprise center.

With the new system, staff members will be able to manipulate data to determine correct claims payment and cost trends. Analysts also will be able to connect the dots between health care providers and questionable claims, or spot spikes in certain treatments or in a specific locality, officials said.

“Right now our databases are so convoluted. They can’t make a match,” Hill said.

For example, Medicare will pay the claim for a patient admitted into a skilled nursing facility only after the patient has been treated in a hospital for three days. It has been difficult for CMS to link the number of days a patient stays in the hospital with the nursing facility claim so they can process the payment.

“Once you have a data warehouse, you’ll have a place where you can check every time,” he said.
The data centers will host new Medicare business applications that are both mainframe- and Internet-based, such as the prescription drug plan scheduled to start in January, and legacy Medicare fee-for-service claims processing applications.

CMS recently released a request for proposals for the enterprise data center and expects to award the 10-year data center contract on March 1 next year. The agency released a request for information for the data warehouse earlier this year.

Modernization of the infrastructure is an important component of the effort to reduce improper payments, combined with policies and procedures, said McCoy Williams, director of financial management and assurance for the Government Accountability Office.

“But if you get the infrastructure in place, it’s much easier to do data matching and those things that will highlight the improper payments,” he said.

The enterprise data initiative, which is the foundation of CMS’ IT modernization, will provide application hosting centers with real-time monitoring and management across the agency, said CMS spokesman Peter Askenaz. It will bring all data center services under direct control of CMS.

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