Doolittle, a former federal prosecutor, said the system has generated some 2,500 leads and identified 600 suspicious cases, some which may mature into major investigations.
In their letter to Carper, Medicare officials said screening technology is now being used to evaluate all Medicare inpatient, outpatient and medical-equipment claims before payment. But payment suspensions did not begin until December 2011 — nearly six months after the system was up and running.
Medicare awarded an initial $77 million contract for the new system to defense giant Northrup Grumman and a group of other companies. About $27 million has been spent out of a four-year budget that could reach $100 million. IBM is also a contractor.
Sen. Tom Coburn, R-Okla., has questioned whether Grumman has the financial services experience necessary to take the lead on the job.
"My point is there was off-the-shelf stuff they could have bought and applied," said Coburn. "You don't have to recreate the wheel."
Responded Doolittle, "The wheel is not being reinvented. We are inventing the first wheel. The use of predictive modeling doesn't exist on this scale in industry."
Coburn says he's not impressed even by the figure of $20 million or more in potential savings that Medicare officials point to.
"If it is fully deployed, we ought to be seeing savings of $5 billion a month," he said. "It will be two to three years before we get an effective predictive system."
Lawmakers say that Medicare has failed to set clear goals for the system, such as a realistic figure for how much it can be expected to save, and by when.
In addition to the new technology, Medicare was also given broad authority to act on leads generated by the system, letting it ban suspicious providers or put a moratorium on allowing new suppliers in high-fraud sectors like medical equipment. But lawmakers question whether the program is taking full advantage of that.
Sen. Orrin Hatch of Utah, the ranking Republican on the Senate Finance Committee that oversees Medicare, says the number of cases being handled by private investigators that initially screen for potential fraud has stayed roughly the same since the new system was deployed.
"The fact is, the anti-fraud contractors were reporting similar, if not better, results prior to this new technology," said Hatch. "It's not giving taxpayers the biggest bang for the buck and we need to change that."
Medicare officials say it will take time. "We are really at the start of this program," said Doolittle. "It's not mature yet. The fruits are going to be produced over a period of years, perhaps even our lifetimes. We're already getting great results."
Kennedy reported from Miami.
EDITOR'S NOTE _ An occasional look at how government works _ or doesn't.
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