The Government’s Use of Data Analytics to Identify Healthcare Fraud
Although data analytics has been around for years, only over the last decade has the government appeared to become better at using it to detect potential fraud. This article discusses the use of data analytics in connection with investigations involving home health agencies, physician referrals, retail pharmacies, the distribution of opioids, and more.
No one knows exactly how much fraudulent conduct costs the United States’ healthcare system. Some suggest it may cost Medicare, Medicaid, and private insurers $100 billion each year. Regardless of the exact amount, everyone agrees that the fraudulent activities result in more expensive healthcare and possibly the deprivation of healthcare for some.
The Department of Justice (‘‘DOJ’’) and agency inspectors general have recovered billions of dollars based upon demonstrated or alleged healthcare fraud. These cases and investigations, however, have generally been limited to a specific company or class of providers. Government investigators have struggled for years with how to identify fraudulent practices in government healthcare programs involving large volumes of claims.
Since 1990, the Government Accountability Office (‘‘GAO’’) has designated Medicare a high-risk program because of its size, complexity, and susceptibility to mismanagement and improper payments. The Centers for Medicare & Medicaid Services (‘‘CMS’’) estimates Medicare contractors process 4.6 million claims per day. Medicaid, the Department of Veterans Affairs (‘‘VA’’), and Department of Defense also process millions of claims. Data analytics appears to be a game changer in terms of the government’s investigation of fraudulent activities relating to these large volume of claims healthcare programs.
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“The Government’s Use of Data Analytics to Identify Healthcare Fraud,” by Merle M. DeLancey, Jr. was published in the May 2018 edition of Pratt’s Privacy & Cybersecurity Law Report (Vol. 4, No. 4), an A.S. Pratt Publication, LexisNexis. Reprinted with permission.
This article was first published in Blank Rome's Government Contracts Navigator blog on March 5, 2018.