BALTIMORE--CMS has launched a new program aimed at detecting and preventing Medicaid fraud and abuse, the agency announced Tuesday.

The new Medicaid Integrity Program will "yield significant Medicaid savings to help sustain the program," CMS Administrator Mark McClellan said.

"Together with our state partners, we are implementing unprecedented steps to assure that Medicaid funds do not support criminal activities within the system," he continued. "With rising health care costs, Medicaid funds are needed more than ever to care for the 55 million vulnerable Americans who depend upon it for their health care."

The fraud program was created by the Deficit Reduction Act with funds that will rise from $5 million in 2007 to $75 million by fiscal year 2009 and each year thereafter. Congress specifically required the use of contractors to review the actions of those who request payment from Medicaid, conduct audits, identify overpayments and educate providers on program integrity and quality of care. Congress also mandated that the agency devote at least 100 full-time staff to the project, which will be implemented in collaboration with state Medicaid officials.

The new Medicaid program will coordinate with the Medicare Program Integrity group on projects such as Medi-Medi, a pilot project that shares data to detect improper billing and utilization patterns, and the Payment Error Rate Measurement Program, which calculates payment error rates.

Total expenditures for Medicaid, which is funded jointly by states and the federal government, are expected to top $300 billion this year.