Jun 28 2023

Advanced Analytics Is Changing How Agencies Fight Fraud

DOJ, Treasury and the Pandemic Response Accountability Committee share their strategies for battling healthcare fraud.

Through analytics, the Department of Justice was able to track down 16 people in Michigan and Ohio, including 12 physicians, who were sentenced last year for submitting more than $250 million in false claims and illegally distributing more than 6.6 million opioid pills.

Data analyzed by the DOJ’s Health Care Fraud Unit uncovered a list of doctors who gave patients an unusually high number of expensive back pain injections. It was determined that the doctors refused to give the patients opioid prescriptions unless they agreed to receive the medically unnecessary injections. The physicians then submitted claims for the injections, which offer a high reimbursement rate from Medicare, Medicaid and other health insurance programs.

The case arose entirely out of data analytics and not tips from sources, says Jacob Foster, acting principal assistant chief of the DOJ’s Health Care Fraud Unit.

“Data analytics is essential to everything we do in the Health Care Fraud Unit,” he says. “The use of data allows us to catch white-collar criminals faster, more efficiently and more effectively than we ever have before.”

Many federal agencies use advanced data analytics to combat fraud. In fact, with trillions of dollars of COVID-19 relief funds available, fraud was rampant during the pandemic, and some agencies are using analytics to go after the cheaters.

The market for data analytics tools is mature, meaning agencies that want to deploy analytics can get everything they need from the cloud or with on-premises solutions, says IDC analyst Ashish Nadkarni.

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The major cloud providers offer data management and analytics tools, including cloud-based software that extracts and integrates data and allows users to build reports on dashboards.

Agencies that prefer to do it in-house will need servers, storage, a database or data warehouse solution, and tools for data integration and extracting insights. Software vendors also offer comprehensive on-premises data management and analytics tools, Nadkarni says.

The technology an agency uses will depend on its specific needs. “You can find applications that provide a comprehensive workflow for you, or you can build them on your own,” Nadkarni says.

LEARN MORE: How big data, analytics, AI and more improve outcomes.

How the DOJ is Fighting Healthcare Fraud

At the DOJ’s Health Care Fraud Unit, eight data analysts assist prosecutors with identifying, investigating and prosecuting healthcare fraud cases.

The analytics team uses multiple databases and tools to conduct its analysis, including the Microsoft Power BI data visualization tool, i2 Analyst’s Notebook and Microsoft Excel. The team also uses multiple internal and external models to detect healthcare fraud, and it maintains files related to its analysis on in-house department servers.

The Centers for Medicare & Medicaid Services provides direct access to its portal so the Health Care Fraud Unit’s data analysts can look at its information. The analytics team also collaborates with federal data teams, including the Department of Health and Human Services and the Drug Enforcement Administration.

“Our team builds models analyzing hundreds of different variables that can indicate fraud,” Foster says. “But data is not the truth. While it can point us in the right direction, we have to go out and investigate.”

The DOJ uses two types of models. In one, it finds providers suspected of fraud by examining the characteristics of medical professionals and others who have been prosecuted for healthcare fraud. Through analytics, investigators find current providers with the same characteristics, Foster says; they then seek national outliers and rank providers with a scoring system.

Another modeling approach is to engage in trend analysis of billing and other healthcare data to find fraud. For example, in 2019, the DOJ saw a spike in Medicare spending on durable medical equipment.

In its investigation, the DOJ found that some equipment makers were paying illegal kickbacks and bribes to medical professionals and telemedicine companies that were ordering medically unnecessary braces for patients.

The DOJ charged 24 people alleged to be responsible for $1.2 billion in fraud. The agency’s work resulted in $1.9 billion in Medicare cost avoidance, Foster says.

“That’s an example of how our investment in data analytics returned outsized results,” he says.

EXPLORE: What is the role of data governance in healthcare?

Using Pandemic Era Funding to Prevent Fraud

The Pandemic Response Accountability Committee (PRAC), established under the CARES Act, built a data analytics platform to help federal agencies find fraud, waste and abuse in $5 trillion in pandemic relief funds.

“It’s what we call ‘pay and chase.’ The money has gone out the door. Now, we are trying to ensure that those who defrauded the government or used money inappropriately are held accountable,” says PRAC Executive Director Jenny Rone.

In August 2021, PRAC launched the Pandemic Analytics Center of Excellence, a secure, cloud-based data analytics platform.

PACE pulls siloed data, such as information on loan and grant recipients, and centralizes it in a data lake, Rone says. Through sophisticated data analytics tools — including artificial intelligence algorithms and natural language processing — agencies can uncover potential fraud or waste, she says.

Source: Department of Justice, “Fraud Section Year in Review: 2022,” February 2023

Once suspicious activity is identified, the PRAC Fraud Task Force collaborates with inspectors general and law enforcement to investigate.

PRAC’s team of data scientists used PACE to identify about 69,000 questionable Social Security numbers that were used to obtain $5.4 billion in Small Business Administration loans, Rone says.

“The oversight community must share data and analytics tools,” she adds. “The pandemic is the impetus, but the need to assess broad risks and protect taxpayer funds is ongoing.”

AndreyPopov/Getty Images

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