Combating Fraud, Waste, and Abuse in Healthcare

Transcription

1 Combating Fraud, Waste, and Abuse in Healthcare ABSTRACT This paper discusses how real time analytics and event intelligence technologies can be used to analyze, detect, and prevent fraud, waste, and abuse in healthcare. Healthcare costs are increasing every year, and a large contributor is fraud, waste, and abuse (FWA) in the healthcare ecosystem. A study from the Institute of Medicine estimates healthcare fraud at a massive $75 billion a year. Technology solutions for combating this problem have been limited to awareness and training initiatives on FWA practices, regulatory audits, and fraud investigations. However, practices like audits and investigations are expensive to implement and are only done after the damage has been done. As a result, the vast majority of the fraud and abuse cases go unnoticed and undetected. On the other hand, increasing litigation and financial reimbursement models that pay per procedure have increased wasteful expenditure, such as ordering unnecessary diagnostic tests. Specific technology solutions that address one aspect of combating FWA like analytics to detect patterns in fraudulent claims, rules engines to enforce predefined rules, and EDI transaction monitoring are all good and solve a specific problem well. However, they are applied after the fact and so fall short of achieving the necessary business outcomes. Here we present a real-time event-enabled approach to detect fraud and waste and act before the payment has been made. The need is to detect and act before the fraudulent transaction has been approved or before a wasteful expenditure has been incurred. As new regulations put increasing pressure on efficiency, the ability to successfully combat FWA may well be the key differentiator for driving better care at affordable prices.

2 WHITEPAPER 2 TYPES OF FRAUD, WASTE, AND ABUSE Let s first look at the different types of FWA that are most prevalent and create a wish list of technology that would help identify and detect each. Later we will consider technologies and show that the FWA problem is solvable, in real time. FRAUD AND ABUSE IN HEALTHCARE Billing for a more costly service than the one provided For each procedure performed, a billing code is submitted that describes a standard cost for that procedure. Up-coding is a fraudulent practice in which the provider organization deliberately uses a more expensive code to get higher reimbursement rates. Billing for services that were not provided Another common fraud is when services that were never performed are added to the claim. Many such services like a routine lab test often go unnoticed but increase the total bill. The ability to detect patterns in claims that have these common services may often result in uncovering small and frequent charges that can add up to a surprisingly large amount for the payer. Providing services that are not medically necessary Medically unnecessary, but expensive services include recommending an ultrasound test for a muscle sprain or suggesting an expensive total hip replacement without adequate proof that it was medically necessary. Technology that can evaluate the claim for several rules, apply advances in machine learning, and at the same time, use investigative case-driven business processes, allow for a human expert to review a claim based on suspicious patterns. Misrepresentation by members Members may intentionally misrepresent their eligibility, add beneficiaries that are not allowed, falsify identities, or abuse prescription drugs. Based on social network analysis, technology can use rules-driven intelligence to detect patterns of suspicious behavior and identify fraud before it happens. Many credit card providers have used this technology, and now the same can be applied to healthcare. Besides this, there are several other types of fraudulent behavior, like the practice of unbundling services, double billing multiple insurance payers for the same service, and others. WASTE IN HEALTHCARE Over-treatment Treating the smallest illness with powerful antibiotics and recommending unnecessary diagnostic tests or expensive brand name drugs when generics would do just as well are all examples of wasteful expenditures. Today, realtime analytics and intelligent event-driven technology that can spot behavior and recommend a suitable course of corrective action is definitely worth the investment. The same technology can also be used for initiatives such as assessing provider cost efficiency by comparing peers or implementing pay-forperformance reimbursements. Other ways to avoid waste in care delivery and coordination can also be explored by integrating with provider EMR and other IT systems.

3 WHITEPAPER 3 Event-intelligent FWA technology Now that we have looked at types of fraud, abuse, and waste prevalent in the healthcare ecosystem, we ll explore how technology can help reduce them. There is no silver bullet to combat fraud. You need technologies that identify and analyze past patterns of behavior and check against those patterns in real time. You need good investigative case management that lets human experts examine complex cases and apply their expertise. You need good mathematical analytics to predict if a particular claim is likely to be fraudulent. And most importantly, you need good integration capabilities to bring all the disparate sources of data together. A TIBCO FWA solution combines several fraud detection techniques. TECHNOLOGY FOR UNDERSTANDING AND ANALYZING HISTORIC DATA Data analytics and visualization technology can help examine historic data and identify relevant patterns of fraud. As an example, Medicare pays for doctor visits using codes. Codes describing more complex care are attached to higher costs than others. Some studies of publicly available data have shown that some providers consistently use codes that pay more. Analytics applied to past data can detect different dimensions of FWA. Does a particular provider always recommend additional and expensive lab tests for a specific diagnosis? Why is a child being prescribed powerful antibiotics, is it a case of prescription drug abuse? The answers are hidden in the data. Using TIBCO Spotfire analytics and visualization tools, domain experts can uncover these patterns. As important as it is, a perfect understanding of the past is only useful if the lessons learned can be applied to the present. A TIBCO FWA solution helps end users very easily encode past insights into actionable rules. The rules act in real time on claims and other transactions. As a result, payers can detect FWA patterns in real time and act on them instead of discovering them after the fact. TECHNOLOGY THAT HELPS UNDERSTAND AND ACT ON EVENTS Some types of FWA cannot be easily detected by domain experts using rules or analysis of past data. You also need the ability to correlate different events and understand the patterns in those events. As an example, consider a provider who submits claims for several procedures performed over a few days when they should have been done together on the same day. Each of the claims looks clean, but when we evaluate them together, an FWA pattern called unbundling is revealed. Using the event server technology in the FWA solution, you can look for patterns in related and even unrelated events and uncover such fraud. Eventprocessing technology can also reduce waste by detecting patterns of medical supply overuse or systematic abuse among a group of related providers. CONTEXT-AWARE CASE MANAGEMENT Fraud patterns are becoming increasingly sophisticated. Real-time pattern detection may not be conclusive, and expert judgment may be needed. In these cases, it is important to have the right workflows that trigger based on suspicious patterns and automatically alert the people with the right skills to examine the cases. Larger investigations may need to be worked on by several experts. A TIBCO FWA solution incorporates rules-driven case management to manage such workflows. Cases can be routed to the people with the right expertise. As an example, suspected fraudulent claims for routine lab tests and for hip replacement surgery can be routed to different experts based on their skills. This integrated workflow can help rationalize the allocation of investigators and yield significant operational efficiencies.

4 WHITEPAPER 4 PREDICTIVE ANALYTICS For more advanced cases, where the fraud patterns are complex or have not been identified with certainty, statistical-based predictive models can be used. Using mathematical algorithms, these models can provide risk scores and other metrics to predict the likelihood of fraud. INTEGRATION OF DATA, APPLICATIONS, AND EVENTS ACROSS THE ECOSYSTEM Integration is the glue that brings together all the events, data, analysis, and interactions across the payer, provider, government ecosystem. At its core, a TIBCO FWA solution incorporates leading integration technologies, including HIPAA-compliant EDI transaction processing. The solution incorporates various adapters for integrating different systems and data sources, real-time and batch file transfer, audits, and log management. This data and event-processing ecosystem provides a foundation for integrating the right data from the right place to analyze, process, and detect FWA patterns. PROCESS IMPROVEMENT AND TRAINING Providers and members may unwittingly follow practices or behave in ways that are not prudent. Regulations also mandate training on general compliance and FWA rules for providers. As regulations change, there may be a need to notify providers so that they are always in compliance. A TIBCO FWA solution recognizes this need and has a built in process improvement, documentation, and rollout component. Any changes to a policy can be adequately documented and communicated to all stakeholders. Proper auditing of the communication can also be useful for any subsequent investigations. COMPONENTS AND CAPABILITIES OF AN FWA SOLUTION The TIBCO solution for combating fraud, waste, and abuse is designed to be comprehensive, covering the entire spectrum of use cases. At the same time, it is flexible and can co-exist with technology already in place. You could chose to implement only a few components of the solution and add others at a later time. You could decide to address only the most common FWA use cases based on historic patterns and rules and not implement predictive modeling. This flexible layer and leverage approach allows fast time to value and continued use of existing IT investments. Analytics Identify Patterns Predictive Scoring Visualization Management Dashboard Medical Necessity Rules Statistical Scoring Common FWA Pattern Detection Provider Specific Rules Investigation Workflows Case Management Wastage Detection Event Patterns Workforce Optimization Process Improvement Rules and Event Intelligence Case Management EDI Gateway Claims Validation Audit and Traceability Application Integration Claims Integration Hub Provider CMS Clearinghouse

5 WHITEPAPER 5 ANALYTICS AND VISUALIZATION TIBCO Spotfire analytics and visualization components provide the ability to connect to any data source and start identifying FWA patterns in minutes. The solution includes pre-built templates that can, amongst other functions, analyze claim data for detecting common over-coding patterns, drill down to analyze outliers, and identify providers that frequently recommend medically unnecessary tests. These pre-built templates help visualize the value that can be unlocked in a short amount of time. RULES AND EVENT PROCESSING Developed using TIBCO event processing technologies, rules can act on events coming from any channel, such as transactional data from an EDI system. The system can detect wasteful expenditure by capturing events from lab or EMR systems. Using prebuilt templates and a business friendly web rules designer, domain experts can identify and encode FWA rules that are identified as a result of analytics or past experience. Prebuilt rule templates that detect common FWA patterns come preconfigured. This flexible approach gives a far superior ROI compared to rigid off-the-shelf solutions. The TIBCO event-processing platform also provides a way to detect eventdriven FWA patterns such as member eligibility fraud, collusion among providers, and others. This combination of rules-driven enforcement and the ability to connect the dots between disparate events is unique in the industry, providing the ability to detect the most complex FWA cases. CASE MANAGEMENT AND WORKFLOWS The underlying business process management technology, TIBCO ActiveMatrix BPM, provides the unique ability to interact with FWA rules and open appropriate cases or workflows. Depending on the severity, the workflow can intelligently route to the exact person in the organization who has the right skills and authority to act. The action can range from a simple review to a more exhaustive investigation. The rules-driven process management and workflow optimization can result in significant operational efficiencies as well as greater success rates of FWA investigations. INTEGRATION HUB The TIBCO integration hub combines several technologies to process claims, manage batch and real-time files, and access applications and data across the entire ecosystem. Key components of the integration hub are TIBCO Foresight HIPAA EDI processing products and TIBCO ActiveMatrix BusinessWorks Plugin for HL7. TIBCO Foresight EDI provides a complete suite of components for validating, translating, and providing insights on transactions in real time. Using an in-memory data grid and intelligent event processing, incoming transactions are analyzed in real time for common fraud patterns. Additional intelligence, like detecting overpayments and matching claim submissions with payments, can now be done easily. Real-time analytics of the data using Spotfire visualization tools is now possible. The ability for instant awareness and instant action using both historic and real-time data is a unique differentiator that the TIBCO Fast Data solution provides.

6 WHITEPAPER 6 SUMMARY As payers increasingly look for technology solutions to improve cost efficiencies and prevent revenue leakage, a solution that can process, analyze, and act on claims submissions and payments in real time brings immediate return on investment. Reduce Fraud and Abuse: Even a 1 percent reduction in fraud and abuse can lead to a 3 4 percent improvement in the net margins. Improve Operational Efficiency: Quickly identifying the disposition of a claim in the system, rapidly reconciling the next best action using analytics and case management, and automatically ensuring that the right people are handling the right requests, adds up to more effective use of human resources, less waste, and faster response to member and provider requests. Prove Your ROI: Components that can work together or independently to process EDI transactions using a plug-in rules engine let you start small, detect the most common FWA patterns, and evaluate your return on investment. Global Headquarters 3307 Hillview Avenue Palo Alto, CA TEL FAX TIBCO Software Inc. is a global leader in infrastructure and business intelligence software. Whether it s optimizing inventory, cross-selling products, or averting crisis before it happens, TIBCO uniquely delivers the Two-Second Advantage the ability to capture the right information at the right time and act on it preemptively for a competitive advantage. With a broad mix of innovative products and services, customers around the world trust TIBCO as their strategic technology partner. Learn more about TIBCO at , TIBCO Software Inc. All rights reserved. TIBCO, the TIBCO logo, TIBCO Software, ActiveMatrix BusinessWorks, Foresight, and Spotfire are trademarks or registered trademarks of TIBCO Software Inc. or its subsidiaries in the United States and/or other countries. All other product and company names and marks in this document are the property of their respective owners and mentioned for identification purposes only. 04/24/15