Ready or Not, Here Comes FADS

Ready or Not, Here Comes FADS

Healthcare Fraud Control Articles

Medicaid programs are paying increasing attention to finding fraud. Some states are purchasing fraud and abuse detection systems (FADS) to replace or augment their Surveillance and Utilization Review Systems (SURS). Unlike traditional SURS, fraud and abuse detection systems usually include sophisticated algorithms for finding suspect patterns and powerful querying and reporting tools to let analysts develop their own methods for finding fraud. FADS is a powerful new kind of tool, but it is not SURS. Medicaid programs need to be prepared to think in a whole new way.

SURS focuses on finding outlier providers and recipients by using profiling techniques that were developed decades ago. SUR staff may find these systems limiting at times, but they are familiar and comfortable like an old pair of shoes.

The problem is that SURS are notoriously easy for providers to trick. As long as the overall pattern of the provider looks like his peers, he’ll never get caught. So fraudulent providers can break up their billing over several provider numbers to keep their payments looking normal.

FADS are intended to make it harder for providers to get away with cheating. They look for known scams using sophisticated algorithms. They are designed to be easy to modify, so that as soon as you find out about a possible scam, you can add reports to identify suspects. Using these systems requires a whole new way of thinking. You have to think like a fraudster, so you can figure out what kinds of scams to look for.

So, How Do You Prepare?

Because of this big difference, in my experience, it is better to keep your existing SURS for the first couple years you have your new FADS. This allows your SUR staff to keep using familiar tools, while learning to use the new tools. I’ve found if you’re trying to replace SURS with a fraud and abuse system, so much effort is spent on recreating capabilities that you’ve had in SURS that it is hard to focus on learning and developing the new tools. The focus of a fraud and abuse detection system should be continuous development and application of algorithms that allow you to respond quickly to new threats.

Another key to success is increasing the human resources available for this work. It is unrealistic and unfair to think that your current SUR staff will continue to do all the analysis they’ve done in the past, and learn to use new tools, create new algorithms and investigate the results of the algorithms. Have your FADS vendor provide lots of analytic support and hire additional staff analysts. FADS will help you create a lot more leads, but you’ve got to have the staffing to follow-up on the leads and turn them into investigations, or you can’t reap the full benefits of the new system