CMS takes battle against fraud to data center

Enterprise data center at a glance

Agency:Centers for Medicare and Medicaid Services

Request for proposal released: June 24

Offers due: Aug. 11

Expected award: March 1, 2006

Contract: Two indefinite-delivery, indefinite-quantity contracts

Duration: 10 years, including a three-year base period and seven one-year options


  • Hosting of high-performance, midtier (Unix and NT) Web applications

  • Hosting of mainframe data center services for applications requiring mainframe computing capabilities

  • Medicare and fee-for-services claims processing

  • Engineering and program management personnel to support CMS-specific activities

Physicians who bilk Medicare on claims soon may be unable to hide 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.

The cost for such improprieties is substantial: Medicare accounts for $21.7 billion of the $45 billion in improper payments governmentwide.

For CMS, the first step in staunching that flow is to consolidate enterprise data center and warehouse operations, so it can collect and store more higher-quality data in a unified repository. Such centralized access is key in helping the agency meet the demands of the new Medicare prescription drug plan, as well as increased claims processing and use of Web applications.

"All the business lines at CMS, such as 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. CMS is an agency in the Health and Human Services Department.

Today, most data center operations that support claims processing are stovepiped, either contracted for a specific application or business process or are not under CMS' direct control.

CMS will fold its 22 data centers into four, separated geographically but acting as one enterprise center.

CMS recently released a request for proposals for the enterprise data center and expects to award the 10-year contract March 1, 2006. The agency earlier this year also released a request for information for the data warehouse.

With the new system, CMS 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 particular treatments or localities, 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," Hill said.

The data centers will host new Medicare business applications that run on both mainframes and the Web, such as the prescription drug plan scheduled to start in January, and legacy Medicare fee-for-service claims processing business applications.

For CMS, making data accessible through a single source is a crucial element in reducing its improper payments. If Medicare fee-for-service claims data is available in one place, those who track improper payments readily can determine if there is a match between a particular physician and his hospital Medicare claims, and fraud and abuse reports from the Office of the Inspector General.

"Right now, all that data is in different databases," Hill said.

But beyond bringing all of the data together, accuracy in Medicare payments is also about how intelligently officials can use data. Enabling users is the next priority for CMS.

"It's not the software so much as just having the infrastructure available more," Hill said. Many software tools exist, but "right now, we don't even have the data in the right place."

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

"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.

Standardization and data center consolidation also will reduce administrative and program costs, he said. CMS, which processes and retains the largest volume of health care data files in the world, anticipates building databases holding about 180 terabytes of Medicare health care data over the next five years.

Mary Mosquera is a staff writer with Government Computer News. She can be reached at

About the Author

Mary Mosquera is a reporter for Federal Computer Week.

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