Kelli Kennedy
and Ricardo Alonso-Zaldivar

WASHINGTON: Launched last summer, a $77 million computer system to stop Medicare fraud before it happens had prevented just one suspicious payment by Christmas. That saved taxpayers exactly $7,591.

Hoping for much better results, a disappointed Sen. Tom Carper, D-Del., says, “I wondered, did they leave out some zeros?”

Lawmakers had expected the system to finally allow Medicare to stanch a $60-billion-a-year fraud hemorrhage.

Now they’re worried about its future performance.

Medicare officials say it’s unfair to grade the new technology on a single statistic.

“Suspending payments is only one way of stopping the money,” said Ted Doolittle, deputy director of Medicare’s anti-fraud program. “There’s lots of ways of stopping the money, and we are using them all. Looking at payment suspensions only — that’s an unsophisticated view that doesn’t give you a full picture of our activities.”

When other benefits of the system are taken into account, such as cases referred to investigators and changes to payment software that result in automatic denial of suspect claims, the potential savings in the first six months of operation easily exceed $20 million, Medicare officials indicated in a Jan. 27 letter to Carper.

However, officials now acknowledge they don’t know how much of that money has actually been recovered.

Other experts point out that the mission of the new system was to stop bogus payments before they leave the Treasury’s coffers, ending what’s known as “pay and chase,” where the agency auto­matically pays claims, even suspicious ones, and then reviews them weeks after the fact.

That can be a self-defeating way to do business.

Law enforcement is usually several steps behind the fraud perpetrators, who sometimes manage to flee the country with millions plundered from the government.

The new computer system was meant to elevate Medicare’s game, putting it in the same league as major credit card companies that can freeze accounts proactively.

“The whole idea for creating this technology was they were going to be able to end pay-and-chase,” said Hank Walther, former head of the Justice Department’s health care fraud division. “But we haven’t yet seen evidence of its success.”

Medicare has “got to explain to us clearly that they are implementing the program, that their goals are well-established, reasonable, achievable, and they’re making progress,” added Carper, chairman of a subcommittee that oversees federal financial management.

“We’re not sure if they’ve done those things.”