Using metadata to detect widespread healthcare fraud: a Massachusetts example

When I served as state inspector general of Massachusetts, I saw first-hand the value of using sophisticated metadata systems to stop wide-spread health care fraud.  When it comes to preventing and detecting fraud, states like Massachusetts are figuring out that if they are not taking advantage of state-of-the-art technology, they are rendering themselves defenseless against entire categories of fraud that otherwise cannot be detected.  In many cases, states are being exploited without even know it, costing taxpayers millions of dollars.

A good example of this is abuse of Massachusetts’ Health Care Safety Net program by out-of-state residents falsely claiming to be Massachusetts residents.  This program, included as part of our pioneering health care reform law, reimburses hospitals and community health centers for care provided to Massachusetts residents who do not have health insurance and cannot afford to pay.

The law creating the program expressly forbids reimbursement for care provided to residents of other states.  It’s a unique and generous program, and one that is susceptible to abuse by both providers and recipients.  Using public records data, we figured out that a particular person who had received hundreds of thousands of dollars in care under the program was in fact a current and long-time resident of New Hampshire.  This led us to undertake a series of one-at-a-time background checks of dozens of other program recipients, identifying current and past addresses, likely employers, property ownership, phone numbers, social security numbers, and an array of other valuable information.  This analysis led us to identify more examples of out-of-state residents whose services had been paid for the program.

We asked LexisNexis if it would be possible to do a system-wide metadata analysis of all program recipients to identify persons highly likely to be out-of-state residents, since it was virtually impossible for my investigators to go through each recipient one at a time.  What I found out was that it was not only possible, but that it could be done very quickly, and that the results would give us readily-usable and critical information that had not been available previously.

This analysis identified that $6.8 million had been paid in a single year by the program for care provided to likely out-of-state residents from 48 other states, 30 percent of whom were from neighboring New Hampshire. As a result, Massachusetts is working to incorporate the use of metadata technology as an anti-fraud tool across our multi-billion dollar public health care and public benefits system. Massachusetts has recently concentrated on going up the curve in the use of sophisticated anti-fraud meta-data systems. Without such systems, it is virtually impossible to prevent and detect fraud such as this. A link to my office’s report and a news story are here: Boston Herald: Out-of-staters “reap free care”.

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