There are a lot of new and exciting health care information technology (IT) companies sprouting up. Most are taking advantage of the many opportunities made possible by the Affordable Care Act, aka Obamacare. These startups are using large amounts of anonymous data from Medicare, Medicaid and private insurance databases and their own sophisticated algorithms to make health insurance and health care easier to purchase and use.

This is all great stuff but health care has an even bigger problem that these data mining and analyzing geniuses can and should address. The problem is health care fraud—a multi-billion dollar a year problem. Technology firms should create algorithms to scan health care claims and financial data to identify and prevent fraud. This type of sophisticated response is needed because health care fraud perpetrators are usually insiders that are very good at crafting and hiding their schemes.

Unfortunately, creating health care fraud detection algorithms may be the easy part for the tech industry. The challenge for these firms is working with the health care industry usual suspects including medical providers, insurers, associations and government regulators.

The health care industry is a special kind of place with several factions fighting hard to protect their members’ interests. There is also the issue of navigating a highly regulated industry and interacting with multiple government agencies. It’s kind of like old school meets new school with old school having more money, a huge head start in regards to understanding the industry and its regulations and established relationships with government policymakers. But if the nation is serious about reducing health care fraud, it is going to need the help of big data analyzing IT firms.

Health Care Fraud Is A Huge Problem

News headlines outlining the latest multi-million dollar health care fraud scheme are becoming more frequent. They usually involve health care professionals, working with other parties, submitting claims for work they did not perform or patients that do not exist. The amount of money stolen is huge and the time the scheme goes undetected is sometimes surprisingly long.

Tackling the difficult problem of health care fraud is the job of government agencies and health insurers. The Federal Bureau Of Investigation (FBI) has primary responsibility for fighting health care fraud. It partners with other federal agencies such as the Food and Drug Administration, Drug Enforcement Agency, Internal Revenue Service, Health and Human Services Office of Inspector General, Office of Personnel Management Inspector General, state Medicaid fraud units and private insurance company fraud investigative units. The military health care program, Tricare, also has a fraud department.

That is a lot of firepower working together to fight a billion dollar problem, but it is not enough. Fighting health care fraud requires the help of a health care IT sector that is skilled in building systems to identify features common to fraud.

But to get the health care IT sector interested, current stakeholders, including government regulators, will have to allow them to create the systems. They can start by authorizing access to claims data and other documentation created and submitted by health care providers and other parties. They may also want to review regulations that address health care fraud like the Health Insurance Portability and Accountability Act (HIPAA) and Obamacare to make health care data collection and scrutiny regulation-lite. Without this type of support and a promise of long-term rewards, health care IT firms will be reluctant to enter the health care fraud detection business.

Conclusion

Health care fraud is a multi-billion dollar a year problem. Multiple government agencies work with public and private sector groups to curb the abuse. Their efforts are noble and they are having increasing success at catching the fraudsters. Still, they have a long way to go to decrease fraud to more acceptable levels. (You could never get rid of all health care fraud.) However, with the help of the health care IT sector, they do have a chance to create data collection and analyzing algorithms to detect fraud more quickly and save us all billions of dollars.

The current approach to rooting out health care fraud is inefficient because it relies on the very thing that perpetuates the fraud in the first place—human beings.

Tags: obamacare, HIPAA