Medicare fraud: Meet the ZPICs

CMS created the Zone Program Integrity Contractor (ZPIC) program to investigate allegations of Medicare claim fraud in the country's seven traditional Medicare program claim processing zones. Kathleen King, a GAO director, testified that the ZPICs say they helped Medicare save about $250 million in 2012.

CMS does not know how quickly ZPICs are conducting investigations, King said. The GAO is looking into the possibility that the ZPICs could save Medicare more money by acting more quickly, according to King.

Hearing witnesses also talked about another Medicare fraud prevention program -- an automated Fraud Prevention System that came to life in 2011. The system is supposed to use "predictive modeling" -- data sifting tools -- to identify suspects for the ZPICs to investigate.

During the first year of operation, the system generated only about 5 percent of the ZPICs' leads, King said. CMS says the system is now the primary source of the ZPICs' leads, but details are scarce, she added.

Dr. Shantanu Agrawal, director of the CMS Center for Program Integrity, said the Fraud Prevention System stopped, prevented or identified $115.4 million in improper payments during the first two full years of operation. Savings increased in the second year, Agrawal said.

King said one problem is that the Fraud Prevention System does not give CMS any way to suspend paying questionable Medicare claims while investigations are still under way.