Today’s Eliot Ness is a Computer Geek

Data Analytics Drive Government Healthcare Fraud & Diversion Investigations

Advanced data analytics by specially-trained government agents have changed the way the federal government investigates and prosecutes healthcare fraud and the diversion of controlled substances.  When government agents knock on your door, they may already know more than you know about your own records.

Or the government may have made serious mistakes caused by faulty algorithms, corrupted data, or improperly assuming guilt because you have a legitimate relationship with a person or entity that is engaged in fraud without your knowledge and unrelated to anything you have done with them.

Traditional healthcare fraud and drug diversion investigations usually begin from the bottom up.  An undercover investigation might identify fraud or diversion by an individual physician or pharmacist.  Investigators might offer the individual leniency if they identify and provide evidence against other participants in the fraud or diversion.

Now the federal government is using advanced data analytics to investigate healthcare fraud and prescription drug diversion from the top down.  In a recent diversion case, an analysis of trends in prescription data led the Drug Enforcement Agency (DEA) to investigate and ultimately to suspend the DEA Registration of a regional pharmaceutical distribution center serving 2,500 pharmacies.  In a recent fraud case, an analysis of trends in Medicare billing data, bank records, and other computerized records led to the arrest of 91 doctors, nurses and other medical professionals on charges of submitting more than $295 million in fraudulent claims to Medicare.

Testifying before a U.S. Senate Committee earlier this month, the Inspector General of the Department of Health and Human Services (HHS) provided an inside look at how HHS and the Department of Justice (DOJ) are mining electronic data to investigate and prosecute fraud, waste, and abuse in federal health care programs.  While the Inspector General no doubt held back some of his agency’s trade secrets, he did provide a general overview of the techniques used to uncover health care fraud.

The process begins by analyzing Medicare or Medicaid claims for anomalies or suspicious patterns.  This might turn up evidence of different health care providers billing for the same or similar services to the same patient.  Or it might reveal a higher volume of claims than one would expect given the demographics of the surrounding population.

Data analysis might also include “time analysis reports,” in which investigators look at the nature and complexity of services being provided by individual healthcare professionals, the amount of time that should be involved, and the number of patients seen in a give day to determine if the number of claims submitted for that day is realistic.  The Inspector General testified that for home health care providers, the data analysts even consider traffic patterns to determine if it is possible for a particular home health care professional to have seen the number of patients for whom claims were submitted.

When anomalies or suspicious patterns are identified, investigators start examining other records, such as bank records to identify possible kickbacks or patterns of unusual payments.  They review corporate and other business records to identify sham companies and hidden connections between seemingly different entities.  All along, the investigators are taking note of names, addresses and other information concerning possible co-conspirators and/or cooperating witnesses.

The investigations are conducted by Medicare Fraud Strike Force Teams composed of both “on the ground” law enforcement personnel and program experts from the Center for Medicare & Medicaid Services (CMS), Special Agents who have received advanced training in investigative technology and data analysis, and other knowledgeable professionals who are able to collect and analyze large data sets and other electronic evidence.

The ease of sharing electronic data facilitates cooperation among government agencies.  The recent Medicare investigation resulting in 91 arrests was conducted jointly by investigators, data analysts, and law enforcement personnel from HHS, DOJ, several different U.S. Attorney’s Offices, the Postal Service, the Department of Homeland Security, the Social Security Administration, the Department of Transportation, and even the Railroad Retirement Board.

The government’s reliance on data analytics raises new and difficult challenges for individuals and companies under investigation – especially if you are innocent or less culpable than the government contends.  Government agents may conclude that you are guilty based on a faulty data analysis.  Trying to convince them otherwise on your own would be a mistake.

If you are facing a government investigation, a civil action or criminal charges, then you should consult with an experienced attorney immediately.  We invite you to contact our office at (917) 652-6504 to discuss your options.  Or click here to contact us by email.

John Howley, Esq.
New York, New York

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