By Bruce Levick
Federal agencies make more than $2 trillion in payments to individuals and a variety of entities each year. Some estimate that as much as $125 billion is spent improperly. Since many grant programs are administered by state and local governments, the federal government has shifted its focus on identifying improper payments to the states and large local governments. The National Association of State Auditors, Comptrollers and Treasurers (NASACT) and SAP co-developed a survey to dig deeper and uncover the challenges faced by state agencies and the efforts underway to address these issues.
The SAP survey surfaced some surprising results. Medicaid was seen as the biggest area of risk, despite the fact most states already have multiple groups responsible for improving claim processing accuracy, auditing claims, and providing fraud, audit and control functions. Sixty-nine percent of the survey respondents expected funding to combat improper payments to remain the same, 21% expected it to decrease and just 11% expected it to increase. Contrast that to the 58% that reported staffing and funding were the primary barriers to using technology to combat improper payments.
It seems that the bad guys just keep getting more and more sophisticated and better tools and techniques are still needed to combat this. There have been numerous articles published identifying this trend. (Cited below). In many cases, the highly efficient electronic claims processing systems of today are our own worst enemy. Take for example, the typical process seen today where a professional criminal easily procures doctor, provider and patient identification numbers on the black market. These lists contain bad data, dead patients, incorrect numbers, addresses, etc., and the online systems of today frequently correct the error and give the criminal opportunities to revise and re-submit before triggering an audit. Hence, thousands of transactions are processed as long as they meet “the rules”. Unfortunately, what meets the rules is not always free from fraud. Stolen identities, misdirected electronic transactions, mail and fictitious businesses are all too common.
Advanced technology is needed to look outside the box and combat this. Agencies need sophisticated tools to combat the latest trends in fraud. SAP Intelligence Analysis compiles and easily associates data across internal and external sources to provide you with new insights to proactively reduce fraud. Social network analysis components tie together relevant pieces of the puzzle including document based relationships as well as geo spatial context of participants. Learn more today.
And what about information in real-time? Mobile solutions can be used to address one of the most problematic issues confronting health and human service agencies. How do you validate your patients and verify they have received services ? What if you could validate the identity of a patient and also verify their receipt of services via phones, iPads, or other types of mobile devices that meet strict authentication requirements? Identity cards and ID’s are easily stolen. Using a cell phone and secure PIN could reduce the fraudulent use of these stolen cards and numbers. Verifying that a patient actually received services before paying the bill would also reduce fraud significantly. What if you could get your constituents to verify they actually received services using a simple text or voice message sent to their mobile phone?
Would that reduce fraud in your environment? I think it would. What are you doing to address fraud in your agency? What challenges are you facing?
Want to learn more or have questions? Email me: [email protected]