Government spearheading IT-driven fraud detection effort

Fraud runs rampant throughout the healthcare system in the United States, whether at private insurance providers or in publicly-funded programs like Medicare and Medicaid. Now, in an effort to combine data and resources from both sectors, government agencies at the state and federal levels will be teaming with private insurers and anti-fraud groups to stamp out crime across the healthcare landscape.

The joint initiative, announced by Attorney General Eric Holder and Department of Health and Human Services secretary Kathleen Sebelius, will attempt to unite efforts to overhaul the fraud detection and prevention systems currently in place. This infrastructure optimization will look to maximize the resources and data already held by organizations, with a long-term goal of using analytics to predict and root out incidents of fraud.

"This partnership puts criminals on notice that we will find them and stop them before they steal healthcare dollars," Sebelius said. "Thanks to this initiative today and the anti-fraud tools that were made available by the healthcare law, we are working to stamp out these crimes and abuse in our healthcare system."

Data sharing

Among the major components of the initiative is a plan for data analysis, and beyond that, data sharing. Partners in the plan are asked to share information they have on fraud cases, from the schemes that they have detected to commonly-used billing codes. One part of the initiative calls for the organizations that have pinpointed areas where fraud is rampant, or "geographical fraud hot spots," to share that data as well.

All of that is in an effort not just to detect fraudulent billings, but to stop insurers from paying out for a claim that has already been filed with a different insurer. This type of fraud is increasingly common, with the perpetrators filing claims for the same services in multiple cities on the same day with different providers, making it difficult to detect before the claim has already been paid.

"By sharing data, information and best practices across all players, this partnership will ensure the public and private sectors are even better equipped to fight fraud and will provide a powerful deterrent to would-be perpetrators looking to prey on patients and steal money from taxpayers," said Karen Ignagni, the president of America's Health Insurance Plans, trade group that is a member of the consortium.

Data sharing, between various government agencies, private sector and even the general public, has been high on the agenda for the federal government in recent months. As Law.com pointed out , sharing data for other other crimes, such as cyberattacks, has become more common. Both sides have engaged in this behavior in an effort to improve national cybersecurity, especially on systems of critical infrastructure.

Predictive analytics

One of the endeavors of the fraud-fighting initiative that could have the biggest impact on the insurance landscape, is the hope that one day, the tools that are developed can be used to predict and find fraud sooner. Currently, many of the tactics still rely on older strategies like "pay and chase," where insurers are mostly detecting fraud long after it is already been carried out. By focusing on predictive methods, as many organizations have begun to work toward, the data analysis can change the way the healthcare industry focuses on fraud in the long term.

"Health plans have prioritized reducing healthcare fraud and use cutting-edge technology and sophisticated data analysis to prevent fraud from occurring in the first place rather than 'paying and chasing' after the fact," Ignagni said.

The group's first meetings will be in the fall, with data analysis among the main topics of conversation as it seeks to lay out a formal structure.

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