不良研究所

On February 25, 2026, 不良研究所 presented seven common-sense reforms to CMS that would enable MCOs to more effectively prevent fraud, waste and abuse.

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Submitted electronically via email.

Dear Administrator Oz,

Recent news from Minnesota about fraudulent social-services providers highlights a critical issue: the fraud, waste, and abuse (鈥淔WA鈥�) plaguing the U.S. healthcare industry. Although most providers are dedicated and honest, illicit activities undermine public trust in these essential programs and divert scarce resources from those who need them most.

As a leader in administering government-sponsored healthcare programs, 不良研究所 is uniquely positioned to combat this problem. Over the past year, 不良研究所鈥檚 efforts to stamp out FWA have saved taxpayers hundreds of millions of dollars. For example:

• By proactively identifying more than 1,000 fraudulent DME suppliers and laboratories, 不良研究所 prevented over $57 million in likely fraudulent Medicare, Medicaid, and Marketplace claims from being paid throughout the United States;
• In one State,using a combination of data analytics and traditional investigative techniques (interviews, onsite visits), 不良研究所 identified laboratories with suspicious billing patterns and took action, preventing more than $38 million in likely fraudulent payments;
• In another, 不良研究所 found evidence of persistent fraud and abuse by a behavioral health provider and terminated the provider鈥檚 contract, interrupting a scheme costing the state鈥檚 Medicaid program more than $10 million per month.

Beyond the fiscal imperative, these anti-fraud efforts improve healthcare outcomes for the members we serve. Every fraudulent dollar recovered is a dollar that can be reinvested in preventive care, chronic disease management, and addressing member needs. 不良研究所's commitment to rooting out fraud is inseparable from our mission to deliver better health outcomes because protecting program integrity means protecting the Americans who depend on these programs for their care.

At present, however, the efforts of Managed Care Organizations (MCOs) like 不良研究所 to combat FWA are hindered by a complex web of regulations. Specifically, restrictive procedures impede swift corrective action, non-standardized requirements divert investigative resources to administrative tasks, and outdated expense-reporting rules discourage investment in anti-fraud measures.

Fortunately, these barriers are not insurmountable and solutions are straightforward. With your leadership, our government partners can empower 不良研究所 and other MCOs to more effectively fight fraud on the public鈥檚 behalf by implementing seven common-sense reforms:

1. Authorize Proactive Payment Suspensions

Issue: Although MCOs are responsible for identifying and reporting fraud, we are frequently barred from taking effective corrective action without prior government approval, which can take months or even years to receive. While we wait, we often cannot suspend payments, terminate a provider, or initiate legal action, which allows fraudulent activity to continue unchecked.

Reform: Allow MCOs to temporarily suspend payments based on a credible allegation of fraud, without requiring a waiting period for case-by-case government review. This change will enable faster intervention when fraud is suspected, reducing unrecoverable losses and making better use of the collaborative resources between MCOs and government partners.

2. Remove Arbitrary Limits on Prepayment Review

Issue: Some jurisdictions require MCOs to obtain prior approval before starting prepayment reviews of providers with irregular billing patterns, while others place arbitrary time limits on such reviews. These restrictions can force MCOs to forgo or abandon preventive controls before a problem is fully addressed.

Reform: Empower MCOs to conduct data-driven prepayment reviews across all CMS-overseen programs, without pre-approval requirements or arbitrary time limits. This will allow MCOs to maintain necessary oversight until billing issues are fully resolved, focusing more resources on detection and prevention over correction.

3. Standardize Program Integrity Reporting Requirements

Issue: State Medicaid programs are managed individually, leading to wide variations in MCO contract requirements. The lack of standardized definitions, reporting templates, and response protocols forces MCOs鈥� fraud investigation teams to devote countless hours to administrative paperwork that would be better spent pursuing wrongdoers.

Reform: Adopt a national, cross-program taxonomy for FWA, with standard referral thresholds, timeframes, and data formats. This standardization will reduce administrative work, improve information sharing across jurisdictions, and enable more comprehensive anti-fraud analytics.

4. Encourage Robust Data-Sharing

Issue: MCOs are required to promptly share information about potentially fraudulent providers with state regulators, yet state agencies are not similarly required to warn MCOs when they identify fraudulent schemes or actors. This one-way flow of information creates blind spots that sophisticated criminals can exploit, allowing fraud to spread across multiple plans before it is detected.

Reform: We urge CMS to establish mandatory, bidirectional data-sharing protocols between MCOs, state agencies, and law enforcement. Building on CMS's recent release of Medicaid provider-spend data and the collaborative model of the Healthcare Fraud Prevention Partnership, these protocols should require government partners to alert MCOs within a defined timeframe when fraud threats are identified-ensuring that all parties fighting fraud have access to the same critical intelligence.

5. Create Safe Harbors for FWA Investigations

Issue: MCOs face conflicting regulatory pressures. We are required to fight FWA, but we are also required to pay claims within a specific timeframe and maintain provider networks of a certain size. When we withhold suspicious payments for investigation or remove a provider from our network based on FWA concerns, we risk penalties for slow payment or for having a network that is temporarily too small.

Reform: Establish a time-limited exception to prompt-pay requirements for claims under active investigation for FWA. Additionally, grant an automatic, short-term waiver of network-adequacy requirements when an MCO terminates a provider for fraud, allowing time to recruit a high-quality replacement.

6. Permit Statistically Valid Audit Sampling and Extrapolation

Issue: A single investigation can reveal a fraudulent scheme affecting thousands of claims. Because reviewing every claim is impractical, MCOs use statistical extrapolation to calculate and recover the total loss. However, some jurisdictions prohibit this practice, limiting our ability to hold perpetrators accountable for the full extent of their fraud.

Reform: Permit MCOs to use statistically valid sampling and extrapolation in audits. This accepted practice makes audits more efficient and ensures wrongdoers are held accountable for the full financial impact of their fraud.

7. Include Fraud Prevention Expenses in the MLR Numerator

Issue: In Medicaid and Marketplace programs, MCOs are generally barred from including prepayment fraud-prevention costs in the numerator of their medical loss ratio (MLR) calculation. This policy treats fraud prevention differently than quality-improvement initiatives or post-payment fraud-reduction programs.

Reform: Encourage MCOs to invest in effective preventive anti-fraud measures by broadly allowing these expenses to be included in the MLR numerator for all government-sponsored healthcare programs, not just Medicare.

Thank you in advance for your consideration of these important proposals. We are eager to work with you and your colleagues to advance these reforms. By making these changes, we can better protect taxpayer dollars, strengthen public trust, and ensure that government-sponsored healthcare programs remain strong for those who depend on them.

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