Healthcare Fraud Control Articles

Robin's Fraud Control Toolbox

Healthcare Fraud Control Articles

There is no single tool that will identify all fraud. Here are some of the tools you’ll need in your toolbox. Add one or two tools at a time to build a full defense against fraud:

  1. Basic edits and audits
  2. Computer Network Security
  3. Rules Based Post-payment Analysis
  4. Random Audits
  5. Outside Data Sources & Social Network Analysis
  6. Geographic Information Systems (GIS)
  7. Predictive Modeling
  8. Advanced Prepayment Edits
  9. Biometrics

U.S. Assails Albany's Efforts on Medicaid Fraud - New York Times

Healthcare Fraud Control Articles

NY Medicaid has a data warehouse that could be used to fight fraud, so why aren’t they using it effectively? Looks like another case of underfunding. Counties want to investigate fraud themselves using the database, but they are meeting resistance from the state. Here are a few excerpts from the NY Times:

U.S. Assails Albany’s Efforts on Medicaid Fraud - New York Times

Sebelius Says New Law Will Crack Down on Medicaid Fraud - Kansas City infoZine

News and Commentary | Healthcare Fraud Control Articles

States are enacting new laws to help fight Medicaid fraud.

Sebelius Says New Law Will Crack Down on Medicaid Fraud - Kansas City infoZine -

Medicaid fraud costs taxpayers money, and to crack down on this crime, Governor Kathleen Sebelius today signed a bill that expands the scope of the current fraud law.

CMS announcement of Medicaid and SCHIP Payment Error Rate Measurement System

News and Commentary | Healthcare Fraud Control Articles

CMS Notice of intent to establish a new system of records for the purpose of identifying payment errors and combating fraud and abuse in State Medicaid and SCHIP programs. CMS will contract for required services.

CMS invites comments on all portions of this notice.

Full Text at CMS


Use Geographic Information Systems to Decrease Fraud

Healthcare Fraud Control Articles

Geographic Information Systems can be used to dramatically decrease fraud. It can be a great tool to help you: identify geographic areas to focus on, illustrate that fraud occurred, and identify participants in fraud rings.

While we’ve talked about GIS for years, it is currently underutilized as a fraud and abuse detection tool. I think one reason it is not used more is that we are intimidated. But we don’t need to be. We aren’t preparing academic papers, so we don’t have to be perfect. We just need to be able to use the tools well enough to be able to spot potential abuses.

Chase the Fraud Back to Its Source

Healthcare Fraud Control Articles

Fraud spreads quickly. People involved in one scam are likely to be involved in another. People who are involved in scams associate with other people involved in scams. Perpetrators use family members, friends and former cellmates to franchise their scams. “In the North Carolina Medicare case, three subjects residing in North Carolina traveled to Florida where relatives taught them how to anonymously file false Medicare claims. They then returned to North Carolina and began filing such claims.”

Due to limited resources, we often ignore suspicious cases if we don’t think they involve a lot of money. But sometimes a few claims are the smoldering coals that will start the next fire.

Understand the Opportunities

Healthcare Fraud Control Articles

What are some particular weaknesses that criminals can exploit?

Electronic Claims Payment. How many times can a provider submit a variation of a claim to your system? How quickly does he find out which variations pay without notice? How much money can he take before you do notice?

Provider profiles are designed to help fairly honest providers make their practices more like the norm. For dishonest providers, it can help them fine-tune their fraudulent billing. They want to look like the norm, so you can’t find them. Looking normal doesn’t mean there is no fraud.

Service and Payment Caps help you control costs, but they can also have unintended side-effects. If claims are always right up to the limit, maybe they are being padded. A Medicaid programs was paying for Oxygen services that were billed just up to the point that prior authorization would be required. Did that many patients need the maximum allowable services but hardly any needed one unit less or enough to be prior authorized? Probably not.

Discover the Loopholes First

Healthcare Fraud Control Articles

Fraudsters adapt faster than we do, so we need to learn to think like them. We tend to think about how to catch fraud before we think about how to commit fraud. That is backwards. We end up limiting ourselves to finding the fraud that is easiest to catch. If I were a criminal, I’d pick the frauds that are hardest to catch, yet still easy to commit. How do we catch them, if the scam is designed to be hard to catch? I never said fraud detection was easy, but if we don’t think about what would be hard to catch, we have no hope of finding this fraud. If we do think about it, we may be able to track it down or even prevent it.

Don’t Create New Loopholes

Healthcare Fraud Control Articles

Sometimes in health insurance, we practically give out recipes for how to get away with fraud. The key to getting away with insurance fraud is to look like everyone else. That way, you stay off the fraud detection radar screen. If we use certain indicators to measure quality (mammograms per 1000, pap smears per 1000), and we don’t do thorough audits to make sure the services were actually provided, providers know they can bill for these services for all their patients in the target population. They don’t have to provide the services, unless you’re actually checking up on them.

I’ve heard of HMOs paying for high compliance to quality goals or allowing compliant providers to avoid the normal authorization process to approve expensive services. This is like saying, follow these certain rules, then we’re going to trust you not to break any other rules.

Improve Prevention: Think Like a Criminal

Healthcare Fraud Control Articles

To outsmart the criminals, we need to learn to think like criminals.

We’re only finding a small percent of total fraud. Hundreds of billions of dollars are lost to fraud in the healthcare industry alone. Right now, finding insurance fraud and healthcare fraud in particular, is a reactive process. We hear about a scam, then we search for it. We’re like fire fighters racing to the latest emergency. Unfortunately, by the time we hear about a new scam, it is often blazing out of control.

The rest of this chapter will give you insights into how to think like a criminal to prevent fraud.

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