Data analytics and industry partnerships throw a one-two punch against fraud

After years of limping along with retrospective review, new technology and anti-fraud partnerships are reinvigorating fraud fighting.

"Data analytics, predictive models and sophisticated algorithms ... can cut through false claims with laser-like efficiency," according to a Coalition Against Insurance Fraud article by two former leaders of the Health Care Fraud Prevention and Enforcement Action Team. "There is a new sheriff in town, and his badge is pinned to a computer."

Implementing the government's Fraud Prevention System (FPS), for example, resulted in $54.2 million in actual and projected savings for traditional Medicare in the system's second year of operation, the article noted. The Office of Inspector General called for modifications to the FPS to increase savings over time. And HEAT teams have raised the fraud fighting bar through state-of-the-art analytics that flag geographic claims anomalies and medical services claims infiltrated by fraud.

Overall, "the issue is less about fraud's costs than the inherent vulnerability of our program," the authors wrote. "It is the high risk exposure that should trigger alarms for a more robust set of controls. No one intentionally created systems prone to fraud, but fraud is so prevalent, and the safeguards so short of resources, that we have virtually put out a welcome mat for thieves."

Another analytics-related success story comes from the work of Peggy Sposato, a data analyst for the U.S. Department of Justice. Sposato pioneered the use of Medicare billing data as a way to identify fraud suspects, AARP Bulletin reported. Her work led to indictments and prison terms for hundreds of criminals. Besides mining data, Sposato taught medical chart and billing validation to agents and prosecutors, and her beneficiary interviews helped prove receipt of services that weren't medically necessary.

Finally, fraud fighting has been bolstered by creation of the Health Care Fraud Prevention Partnership. The partnership aims to prevent payment of fraudulent claims by private and public payers. The group shares aggregated data securely through a trusted third party, the Coalition noted.

Despite a modest start, the partnership's work helped the government find more than $20 million in improper payments, the Coalition reported. Private payers identified millions more in wasteful spending.

"Now it's time for the partnership to mature and reach its full potential," the article concluded.

For more:
- read the Coalition Against Insurance Fraud article
- here's the AARP Bulletin article