Kentucky to use SAS® Analytics for fraud detection, prevention statewide

Medicaid, temporary assistance, food stamps are initial focus areas

Kentucky will use SAS® Analytics to combat fraudulent payments, beginning with the state's new Health Benefits Exchange. Using the SAS Fraud Framework for Government, Kentucky will analyze eligibility and claims in Medicaid, food stamps and temporary assistance to detect and prevent fraud. A statewide system will allow Kentucky to add new data sources and fight fraud in other areas in the future.

"Kentucky, like other states, balances providing services with budget constraints," said Lori H. Flanery, Secretary of the Finance and Administration Cabinet and interim CIO. "If agencies throughout state government can access shared data resources to detect fraud, then we can alleviate those burdens that negatively impact all taxpayers."

Kentucky's Finance and Administration Cabinet will use the SAS Fraud Framework for Government to uncover and prevent abuse in the state's Medicaid program, Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF). A program integrity system was a requirement of the contract for the state's Health Benefits Exchange, which was awarded to Deloitte.

"States are embracing an enterprise approach, which enables agencies to better share data and more easily expand fraud-fighting efforts to additional programs," said Greg Henderson, Government Practice Lead, SAS Fraud and Financial Crimes Global Practice. Michigan has also launched a statewide SAS system, the Michigan Enterprise Fraud Detection System.

According to the US federal government website,, the estimated loss from fraudulent payments and waste in 2012 was $19.2 billion for Medicaid and $2.7 billion for SNAP.

"While this is a national crisis, it hits individual states the hardest," said Henderson. "But it's also an opportunity for states to recover funds and avoid costs without cutting services to citizens."

The SAS Fraud Framework for Government helps agencies in many areas – from detecting suspicious patterns in social programs to uncovering tax evasion to identifying sophisticated fraud rings. SAS software's fraud detection capabilities have developed over 36 years of serving government, defense and business.

The SAS Fraud Framework's hybrid approach to alert generation combines business rules, anomaly detection, predictive models and social network analysis. SAS Social Network Analysis analyzes all related activities and connections to uncover previously hidden relationships that could indicate organized fraud rings.

SAS technologies and solutions for government are used in all 50 state governments to transform their operations to deliver the right services, at the right time, with the appropriate resources. SAS offers a wide array of data management, business intelligence and analytics solutions, and collaborates with governments to create innovative offerings tailored to specific departmental and agency goals.


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