BOSTON (Reuters) - Two federal agencies hope to take a smarter approach to cracking down on costly fraud in the U.S. health care system by borrowing successful practices used in private industry.
Attorney General Eric Holder and Department of Health and Human Services Secretary Kathleen Sebelius promoted the new tools at an event in Boston on Thursday focused on fraud prevention.
The new approach is based on “predictive modeling,” a combination of advanced analytics, linkage analysis, behavioral analysis and other statistical techniques.
Sebelius compared the modeling tools to ones often used by banks or insurance companies — that might, for example, throw up a red flag if there are unusual patterns of usage on a person’s credit card.
“It’s about time we put those kinds of tools to work in the public system,” she said. “We want to say ahead of the criminals rather than doing the old pay and chase routine.”
Predictive modeling by the Centers for Medicare and Medicaid Services (CMS) recently uncovered two Houston-area companies that had set up “false-front” businesses.
Waste and fraud cost Medicare and Medicaid an estimated $54 billion in 2009, including schemes created by criminals operating as health care providers or suppliers, and involving everything from scooter scams to prescription drug sales abuse.
This year a new crop of scam artists has emerged, seeking to profit from misinformation about the Obama Administration’s health care reform, Holder said.
Boston’s fraud prevention summit was the fourth in a series from the agencies, following events in Los Angeles, Miami and Brooklyn, New York. On the agenda are Detroit, Philadelphia and Las Vegas.
Health care fraud is evident across the nation, but there are definite hot spots, Holder said.
“In New England these schemes have reached crisis proportions,” he said, adding that “we are fighting back in bold, innovative and creative ways.”
Reporting by Ros Krasny; Editing by Jerry Norton