'FIRST' things first

Highmark makes healthcare-fraud prevention top priority with SAS®

Dwarfing the financial impact of other types of insurance fraud and credit card scams, the high cost of health insurance fraud is driven by cheats who know where to find the big money. In the long run, it's the consumer who gets stuck with the bill. The National Healthcare Anti-Fraud Association estimates that of the nation's annual healthcare outlay, at least 3 percent – or $51 billion in 2003 – was lost outright to fraud. Government and law-enforcement agencies say the loss may be much greater, as much as 10 percent of annual expenditures, or $170 billion.

Health insurance fraud exacts a cruel toll on society, undercutting the quality of care and straining patients' wallets. The U.S. Government Accountability Office estimates that of the $1.7 trillion Americans spend on healthcare each year, between 3 and 10 percent is fraud related. Meanwhile, the National Health Care Anti-Fraud Association puts that number between 5 and 10 percent. That amounts to a $51 billion to $170 billion problem nationwide.

Fortunately, companies like Highmark – the Pennsylvania-based Blue Cross Blue Shield affiliate that covers more than 25 million Americans – are hot on the trail of would-be fraudsters, who include the insured, providers, pharmacies and third-party billers.

Tom Brennan, Director, Special Investigations Unit

"We empower Tom's group by gathering information to help them respond to potential fraud, to conduct investigations and to come to decisions more quickly than before," explains Shawn McNelis, Highmark's Vice President of Healthcare Informatics.

Because resources are limited, he adds, it is critical that the SIU operates as efficiently and effectively as possible. "Essentially, we use SAS to enable a finite number of people to handle more cases than they were able to handle before," McNelis says.

How does SAS help detect fraud?
The SIU works closely with Highmark's healthcare informatics group, which supports a SAS-based sleuthing application dubbed FIRST: Financial Investigation Reporting System for Tomorrow. Highmark launched FIRST after achieving early successes providing SIU with ad-hoc reports that resulted in significant results in fraud detection and subsequent cost savings.

Jack Emes, Director of Informatics Engineering

Before using SAS in its fraud-detection and prevention efforts, Highmark had a manual system in place in which investigators grabbed claims data and manipulated it into reports. "But SAS not only builds reports on data; it also graphs the information from various sources throughout Highmark," says Jack Emes, Highmark's Director of Informatics Engineering. "We're saving literally hours with each report and investigation, which allows us to get through cases even faster."

In fact, according to the SIU's Brennan, work that used to take eight hours now takes only minutes. That means his investigators can now handle a 30-percent increase in caseload. That translates into productivity gains and personnel savings of $200,000 per quarter, he says.

Chris Scheib, Manager of Data Mining and Pattern Discovery

"With SAS, we're able to work better faster," Scheib says. "That, in turn, improves our ability to detect fraud. And, with SAS, we can model what normal claims look like so that we can then spot the deviations. Ultimately, we will be able to prevent questionable claims from ever being considered for payment."

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