3 ms·

I think it's worth being highly skeptical about fraud rates that are stated to two decimal places of precision. Fraud is by design hard to accurately detect. It

I think it's worth being highly skeptical about fraud rates that are stated to two decimal places of precision. Fraud is by design hard to accurately detect. It would be more accurate to say, Medicare decides 7.66% of its cases are fraudulent according to its own policies and procedures, which are likely conservative, and cannot take into account undetected fraud. The true rate is likely higher, perhaps much higher. There's also the problem of false negatives vs positives. If your goal is to cover 100% of true cases you can achieve that easily by just never denying a claim. That would of course yield stratospheric false positive rates (fraud). You have to understand both the FN rate (cost of missed fraud) vs the FP rate (cost of fraud fighting) and then balance them. The same applies with using models in science to make predictions.

deleted 1y ago
[deleted]
alwa 1y ago
The number seems to come from Medicare’s CERT program [0]. At a hurried glance they seem to have published data right up to present, but their most recent interpretive report I could find with error margins was from 2016. That one [1] put the CIs on those fraud rates in the +/-2% range per subtype and around +/-0.9% overall. Bearing out your point. CERT’s annual assessments do seem to involve a large-scale, rigorous analysis of an independent sample of 50,000 cases, though. And those case audits seem, at least on paper and to a layperson, to apply rather more thorough scrutiny than Medicare’s day-to-day policies and procedures. As @patio11 says, and to your point, “the optimal amount of fraud is non-zero”… [2] [0] https://www.cms.gov/data-research/monitoring-programs/improper-payment-measurement-programs/comprehensive-error-rate-testing-cert https://www.cms.gov/data-research/monitoring-programs/improp... [1] https://www.cms.gov/research-statistics-data-and-systems/monitoring-programs/medicare-ffs-compliance-programs/cert/downloads/medicarefeeforservice2016improperpaymentsreport.pdf https://www.cms.gov/research-statistics-data-and-systems/mon... [2] https://www.bitsaboutmoney.com/archive/optimal-amount-of-fraud/ https://www.bitsaboutmoney.com/archive/optimal-amount-of-fra...
- mike_hearn 1y ago
  That CERT doesn't seem to be looking for fraud, but more like errors in the bureaucracy. They request medical documents and assess them against the regular criteria, but no effort is made to find the sort of fraud criminals would engage in, like fraudulently produced documents for tests that never happened.

deleted 1y ago

[deleted]

alwa 1y ago

The number seems to come from Medicare’s CERT program [0]. At a hurried glance they seem to have published data right up to present, but their most recent interpretive report I could find with error margins was from 2016. That one [1] put the CIs on those fraud rates in the +/-2% range per subtype and around +/-0.9% overall. Bearing out your point. CERT’s annual assessments do seem to involve a large-scale, rigorous analysis of an independent sample of 50,000 cases, though. And those case audits seem, at least on paper and to a layperson, to apply rather more thorough scrutiny than Medicare’s day-to-day policies and procedures. As @patio11 says, and to your point, “the optimal amount of fraud is non-zero”… [2] [0] https://www.cms.gov/data-research/monitoring-programs/improper-payment-measurement-programs/comprehensive-error-rate-testing-cert https://www.cms.gov/data-research/monitoring-programs/improp... [1] https://www.cms.gov/research-statistics-data-and-systems/monitoring-programs/medicare-ffs-compliance-programs/cert/downloads/medicarefeeforservice2016improperpaymentsreport.pdf https://www.cms.gov/research-statistics-data-and-systems/mon... [2] https://www.bitsaboutmoney.com/archive/optimal-amount-of-fraud/ https://www.bitsaboutmoney.com/archive/optimal-amount-of-fra...

mike_hearn 1y ago
That CERT doesn't seem to be looking for fraud, but more like errors in the bureaucracy. They request medical documents and assess them against the regular criteria, but no effort is made to find the sort of fraud criminals would engage in, like fraudulently produced documents for tests that never happened.