Stop Fraud, Waste and Abuse with Two Software Solutions

Every year, the Department of Health and Human Services Office of Inspector General (OIG) conducts healthcare fraud investigations which often result in significant amounts of money returned to HHS along with interest and penalties.  The results of the 2018 investigation showed that more than 600 defendants in 58 federal districts were charged with participating in fraud schemes involving about $2 billion in losses to Medicare and Medicaid.


The objective of the investigations is to protect Medicare and Medicaid and deter fraud — sending a strong signal that theft from these taxpayer-funded programs will not be tolerated.


Additionally, honest mistakes to erroneous billings (as mentioned in our previous article) and wasteful diagnostics tests contribute to a diverse and complex fraud, waste and abuse (FWA) landscape which is currently alive and in good health, pun intended.


As a consequence of the different types of FWA, premiums and out-of-pocket expenses for consumers go up as well as benefits or coverage are reduced. For employers-private and government, health care FWA increases the cost of providing insurance benefits to employees raising the overall cost of doing business.


The FWA problem in Medicaid and Medicare is so pervasive that the Office of Inspector General of the U.S. Department of Health and Human Services,  provides an online training course to discuss the laws against health care fraud, for example:

  • Violating Medicare assignment provisions or the physician agreement;
  • providing false or misleading information expected to influence a decision to discharge a patient;
  • failing to provide an adequate medical screening examination for patients who present to a hospital emergency department with an emergency condition or in labor;
  • and making false statements on applications or contracts to participate in a Federal health care program.


A comparison of the government investigations of 2017 and 2018 (see chart below) showed that the defendants charged increased 31.5% and the medical professionals hiked to 30.3%.  Regarding the economic losses caused by the different types of FWA, a significant upward tendency showed an increment of 35% in losses.



National Healthcare Fraud Investigation Comparison 2017-2018

Concept 2017 2018 Percentage increase
Defendants charged  412 601 31,45%
Medical Professionals 115 165 30,30%
Billions in Losses 1,3 2 35,00%
Exclusions issued 295 587 49,74%
Federal districts 41 58 29,31%
Medicaid Fraud Control Units 30 30 0,00%
OIG Agents 350 350 0,00%


In the face of the relentless detriment caused by these offenses to federal entities, private persons and taxpayers, the healthcare sector confronts pressing issues daily and machine data from applications are a great ally for healthcare entities to contribute to lower costs and ensure the prevention of a certain type of FWA.


Besides costs increments in healthcare due to FWA, the growing population resulting from states expansion presents an extra challenge for the Centers for Medicaid and Medicare (CMS). A  brief prepared by the CMS Coordination office demonstrated that the total Medicare population, including Medicare-Medicaid enrollees, grew from 45.6 million in 2006 to 58.3 million in 2015, a 28 percent increase.


                                Source: Center for Medicare & Medicaid Services


1. Software Solutions to Stop FWA: For example, a real-time point of care solution software can solve several cases of FWA and help reduce costs for the administration of the growing population. This model uses a tracking system and automatically flags suspicious behavior for immediate intervention. The model enables payers and governments to immediately identify and flag potentially abusive or fraudulent activity by providers or patients. With this software solution, the provider has access to the business rules which helps to change his or her behavior, thus preventing cases before they occur.

Automated real-time prevention, monitoring and interventions are far more effective and less expensive than “pay and chase” approaches prevalent today.



Another investigation done by  Elaine Howle, California state auditor,  showed that Health Care Services paid at least $4 billion in questionable Medi-Cal payments from 2014 through 2017 because it did not ensure that counties resolved eligibility discrepancies between the state and county Medi-Cal eligibility systems in a timely manner.



 2. Instant Verification of Eligibility: This case alone could have been solved with a  managed care solution that uses real-time at the point of care solutions to verify eligibility instantly, thus saving  $4 billion of taxpayers dollars. When a patient arrives at the provider’s office and shows an identification number, eligibility is instantly confirmed. This is possible because the payer and the provider are electronically connected. Furthermore, the provider is granted instant access to the patient’s record which includes such information as diagnosis risk factors (diabetes, heart disease, allergies, etcetera), current medications, and results from recent tests or scans.


A customized real-time at the point of care solution can prevent billions of dollar losses to Medicare and Medicaid organizations caused by FWA and improve administrative workflow to tackle the growing population in enrollees due to states expansion.


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