Hatch spokeswoman Julia Lawless said the report seems promising at first glance but said Hatch will closely review it to see if "the numbers still hold up under scrutiny."
The system's projected savings are only for one year, but anti-fraud administrator Peter Budetti noted the actual savings could be much more because a provider that has been banished from the program could have stayed in the system for years, racking up hundreds of millions of dollars in bad claims.
The bulk of the projected savings came in referrals to law enforcement that remain under investigation but will likely result in payment suspensions or kicking providers out of the program. Federal health officials did not say how many cases were pending but estimated about $68 million in potential savings in that category.
Federal health officials have struggled with how to measure the success of the Fraud Prevention System. In the past, it was measured by how much money law enforcement officials recovered. Now, it's based on how much money is saved before it's paid.
Data from the new system also launched 536 investigations and provided information for 511 others already in progress, but it's unclear what actions had been taken based on those investigations.
"We have shown this technology can work in fighting health care fraud, and we have seen encouraging results. The system is designed to grow in sophistication and complexity, helping the government stay one step ahead of fraudsters," Budetti said.
The new screening technology, which was mandated by Congress, is housed in the Baltimore area in a $3.6 million command center.
In the past, investigators individually screened each claim as it came in, determining on face value whether it looked suspicious. Under the new system, claims are run through a series of sophisticated computer models that can spot suspicious billing patterns and put that claim in the context of all the claims from that provider and claims from other providers in a particular industry.
For example, does a storefront wheelchair retailer in Los Angeles, for example, have lots of customers in San Francisco, more than 350 miles away?