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Preventing payment of fraudulent claimsHCSC seeking to save millions on healthcare fraud with SAS®Costing billions of dollars a year for both health insurers and the insured alike, fraud has emerged as a perilous criminal industry in the United States. While the vast majority of healthcare-related organizations are made up of honest, hardworking providers, sometimes a dishonest few can cause problems for the entire system.  Check out this video to learn more about Health Care Service Corp. and its successes with SAS. View Video (Runtime: 4 mins, 50 secs)You have questions; our customers have answers. Check out this video Q& A. 
Bob Walsh
VP of Special Investigations Corporate Security and Safety, HCSC View Video 
Kyle Cheek
Director, Data Analytics HCSC View Video 
Asha George
Senior Statistical Analyst HCSC View Video 
Sheri Farrar View Video (Requires Windows Media Player 6.4.7 or higher or RealPlayer 6 or higher) Some unscrupulous employers might enter ineligible or even nonexistent participants in a health plan and submit claims on their behalf. Some medical device suppliers will bill hospitals for equipment they never supplied. A pharmacist might conspire with an individual to distribute painkillers on the black market, or third-party billers might submit claims for nonexistent services using a real physician's name, even though the physician isn't involved. All of these scenarios not only hurt the insurance carrier, but, more importantly, they hurt member groups by contributing to escalating healthcare costs. With help from SAS, insurers like Health Care Service Corp. (HCSC) are enhancing their ability to identify cases of fraud proactively before schemes become fully developed and result in significant costs, while putting an end to a practice that costs the industry billions of dollars each year. "The industry estimate is that somewhere between 4 and 10 percent of all health benefits dollars that are paid out are paid on fraudulent claims," says Kyle Cheek, HCSC's Director of Data Analytics. "In a $2 trillion a year industry, even a small percentage is a huge amount of money."
Spotting suspicious patterns
"SAS helps us protect the integrity of our company," Cheek says. "If we're taking the steps we can take to stop bad behavior more quickly, we save costs. And that's an impact clearly felt by the employers we serve." Using SAS, HCSC mines years and terabytes of data relating to claims, providers, members, groups, accounts and products from all three of its Blue Cross and Blue Shield plans. "SAS gives us the ability to connect multiple data sources so that we can efficiently access the data that we're analyzing," Cheek says. "We have many data sources with proprietary front ends. SAS gives us a common interface that allows us to bring the disparate data into a common format and manipulate it so that we have integrity when we put all the data together."
Saving millions of dollars
At the same time, SAS can help HCSC determine when several providers are submitting claims using the same provider code, which is an indication that they're part of the same practice. That's an instance when a provider might legitimately bill for 80 hours in a single day, which helps HCSC avoid needless investigations that are costly for both the company and the providers. "But sometimes we come across providers who are billing us for 16 hours a day every day – and they're the only provider in the office," says Asha George, Senior Statistical Analyst in HCSC's Special Investigations Department Intelligence Unit. "In one such case, on closer investigation, we uncovered that the provider had been on probation for alcohol and drug abuse for the past 10 years. Since he was displaying aberrant behavior again, we felt like we had a good case for the FBI." And that's another HCSC goal: In addition to stopping fraudulent claims from ever being paid, the company wants to have solid cases to turn over to law enforcement for investigation and prosecution. "If we stop a provider who's been committing fraud for a year, we'll save our customers millions of dollars in the future," explains Bob Walsh, HCSC's Vice President of Special Investigations and Security. "We're making an impact not only on our own business, but on our customers' [businesses] as well."
Stopping fraud in real time
HCSC expects that growth to get a boost from an enhanced application it's developing in cooperation with SAS and IBM. The new fraud application will combine the power of SAS®9 data access and advanced analytics with IBM's FAMS (Fraud and Abuse Management System), which includes 3,800 health insurance industry-specific features and rules. The goal is to detect fraudulent claims and stop payment on them in real time. "Our goal is to be bigger, better and faster in the detection of fraud," Walsh says. "This program should really set us apart from everyone else in our ability to do that and provide tremendous value to our customers." Copyright © SAS Institute Inc. All Rights Reserved. |
Kyle Cheek Health Care Service Corporation
Business Issue:
Spotting fraudulent insurance claims.
Solution:
SAS brings together various data sources to spot suspicious trends. "Our goal is to be bigger, better and faster in the detection of fraud. This program should really set us apart from everyone else in our ability to do that and provide tremendous value to our customers." Bob Walsh, Vice President of Special Investigations and Security Read more:
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