The War on Healthcare Fraud

This is the first of in series of blogs, articles, webinars, eBooks, and news blogs to help healthcare agencies, healthplans and their Fraud Investigation Units build the capabilities they need to win the war on fraud, waste and abuse. 

Accelare - Alivia Technology Machine Learning and AIThe film “The Imitation Game” is a suspenseful drama that captures the incredible work done by the Enigma code breakers during World War II. The top minds in the UK worked for years in secret at Bletchley Park to crack the famously difficult Enigma code that the German forces used to communicate. Not only was the challenge difficult, but time was of the essence. Some estimate that the incredible work of the code breakers, and the work of Alan Turing in particular, shortened World War II by several years.

At Bletchley Park, the code breakers gathered every day to try to decode the messages sent by the German forces. The Enigma machine was reset every morning by the Germans to a different set of code, meaning that the code breakers had a very limited window to crack that day’s code. They were perpetually behind. Alan Turing began thinking of an alternative plan. He set out to design a machine to crack the code for them, and attack the problem on a much more effective scale. In effect, they developed and utilized the first computer that could solve the code as an industrial process, rather than a single task.

Much of the work that Turing and the other code breakers did can be applied to modern day processes.

Take for example the issue of Medicaid fraud, waste and abuse. This is a rampant problem facing many Government Health Agencies, Insurers and Healthcare Systems, and we are currently losing the war against it. Considered the following:

  1. Healthcare is a tempting target for thieves. Medicaid doles out $415 billion a year; Medicare nearly $600 billion. Total health spending in America is a massive $2.7 trillion, or 17% of GDP. (Economist)
  2. It is estimated that fraud and the resources to fight it added as much as 10% or $98 billion to the Medicaid/Medicare budget, and as much as $272 billion for the entire health care system. (Economist)
  3. Providers were complicit in 62% of the cases, and the beneficiaries were complicit in 14%. (General Accounting Office)
  4. Fraud mutates too. As old hustles are rumbled, fraudsters invent new ones. (Economist)
  5. U.S. recovers $16 for every $1 it spends fighting civil health care fraud. (Center for Counter Fraud Studies)
  6. Resources are tight for investigators. New York has a Medicaid investigations division of 110 (including support staff) to scrutinize $55 billion of annual payments and 137,000 providers. (Economist)

The current processes for fraud and abuse typically utilize a hotline for alerts or tips, which in turn triggers fraud investigators to launch a single investigation. Think of it this way: a single investigation into Medicaid fraud involves invested time and resources into a potential violation, and hopefully recovers money or stops the pattern of abuse. But this can only stop one instance of fraud at a time.

In other words, they are cracking the code by just looking at a single encoded message at a time.

  • What if there is another way to uncover and address fraud, waste and abuse faster, earlier and cheaper?
  • What if in 4 months you could set up predictive algorithms and machine learning to continually determine patterns and predict future outcomes and trends?  
  • What if the system utilizes many existing tools and is easily configurable by users and/or administrators to anticipate future needs?

Alivia Technology's new artificial intelligence platform Absolute Insight is tackling this problem in multiple US States. It uses the common format for Medicaid records, compiles them in a database, and runs predictive analytics to pinpoint problematic claims. With this everyday tool to spot providers who are outliers, fraud investigators quickly spot claims that should be denied or investigated.

Rather than looking at a single occurrence of fraud raised through a channel like a hotline, Absolute Insight can simultaneously process millions of records and find fraud patterns known and previously undiscovered. Knowing where to dig for outliers and collect revenues had a big upside. Clients are reporting 20X ROI in a matter of weeks!

Like the Turing machine, this new approach is giving fraud investigators the upper hand the War on Medicaid fraud, waste and abuse.

 Learn how one State Agency is starting to win the war on healthcare fraud, waste and abuse.

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