One of the toughest aspects of detecting health care fraud is the fact that any medical service provider is a potential fraudster. They don’t need unsupervised access to an employer’s accounting system or billing records to commit fraud. They don’t need the combination to a safe, the keys to a locked room or access to a building after hours to steal. Anyone who is authorized to bill has the potential to commit billing fraud.

This makes it difficult, given the massive volume of medical billing that transpires every day in the US, to isolate those cases where fraud is occurring. Health care fraud can be as subtle as an incorrect code in a submission for payment or billing for more services than were provided. There are as many schemes as there are schemers, so detection is an ever-evolving game.

Data = Power

What is clear is that data about providers is at the heart of health care fraud detection (as well as prevention) and that the more accurate data we have at hand, the more power we have to fight fraud at the front end, before the fraudulent claims are paid.

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In his opening Statement at the Subcommittee on Health Hearing on Examining Options to Combat Health Care Waste, Fraud and Abuse in November 2012, the Honorable Joe Pitts said:

The federal government has made strides recently to improve catching fraudulent providers and beneficiaries, and I commend them for their efforts. However, at the same time, they have largely failed to implement mechanisms that would prevent fraudulent payments from being made in the first place. Prosecuting offenders does not get back all the money they stole.

Data Must be Current

One strategy to prevent the payment of fraudulent claims is monitoring current provider data to look for anomalies in billing and identify providers who may be billing incorrectly or dishonestly before claims are paid. To do this, the data must be as up-to-date as possible, a mammoth endeavor given the number and dynamic nature of providers in the system.

“Provider data changes daily,” says Brad Bauer, Executive Director, Government Services, at Health Market Science, a supplier of provider data and end-to-end solutions that address data management, regulatory compliance and market intelligence. .  . The company uses proprietary technology to collect, analyze and publish comprehensive, accurate and current information on more than six million individual healthcare providers and 1.4 million healthcare organizations across the United States.

Provider churn is high and according to Health Market Science research, 29,000 prescribers change their primary address each month. That’s 135 address changes per hour. Add to that the changes in licensing, updates regarding sanctions, providers reported deceased, etc, and you have a constantly changing database that is impossible for insurers to maintain without investing in technology and dedicating manpower and money to the task.

Without up-to-date provider data, insurers are unable to spot a fraudulent claim before it is paid. They also face possible sanctions for non-compliance with regulatory standards outlined in the Affordable Care Act (ACA).

Data Must be Used

“Since we maintain this file and we receive updates from more than 2,000 unique sources, we can integrate this file into our customer’s file of providers that they use to pay claims,” says Bauer. “We are continually updating that file and identifying any potential risks, either retrospectively from a payment chase or collections standpoint, overpayment or prospectively.”

Using data to validate claims accurately as they are submitted has obvious advantages, saving payers money and time spent in recovering payments made to providers who could have been identified as high-risk, deceased, sanctioned or improperly licensed. But, most importantly, the effective use of up-to-date data ensures that unscrupulous providers are identified quickly and removed from the healthcare system.