IG: HHS predictive analytics require better reporting on savings and ROI

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The Health and Human Services Department has implemented predictive analytics technologies, but it hasn't  fully complied with the requirements for reporting actual and projected improper payments recovered and avoided in the Medicare fee-for-service program and its return on investment, says an HHS inspector general audit report (.pdf).

Under the Small Business Jobs Act of 2010, Congress required HHS to use predictive modeling and other analytics technologies to identify improper Medicare fee-for-service claims. 

But, HHS hasn't  reported its actual and projected savings and cost avoidance and had inconsistencies in its data it did submit, auditors say.

In addition, the department's methodology for calculating other costs associated with its predicative analytics system, including reporting costs, indirect costs, and projected costs, included some invalid assumptions that may have affected the accuracy of those amounts. As a result, the IG concluded that it could not determine the accuracy of the HHS information, which impeded the ability of auditors to quantify the amount of the inaccuracies noted in their report.

However, auditors acknowledge that developing initial year measurements for actual and projected savings and cost avoidance that have accrued from the use of predictive analytics reporting is inherently difficult due to the fact that it is a "new venture and because of the decentralized nature of the FPS business processes."

For more:
-download the IG report (.pdf)

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