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Client:Large integrated healthcare provider

Challenge:Contain the escalating costs of medical identity fraud

Solution:FICO® Payment Integrity Platform and FICO®
Identity Resolution EngineResults:Identification and prevention of medical identity fraud cases costing hundreds of thousands of dollars apiece

Published in: Software
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  1. 1. © 2016 Fair Isaac Corporation. All rights reserved. 1 A single case of medical identity fraud can cost a healthcare provider hundreds of thousands of dollars. PAYMENT INTEGRITY PLATFORM Leading healthcare provider exposes medical identity fraud with link analysis technology Leading healthcare provider exposes medical identity fraud with link analysis technology Client: Large integrated healthcare provider Challenge: Contain the escalating costs of medical identity fraud Solution: FICO® Payment Integrity Platform and FICO® Identity Resolution Engine Results: Identification and prevention of medical identity fraud cases costing hundreds of thousands of dollars apiece Connecting the dots to spot false identities Prescription drug abuse is on the rise. In fact, annual deaths involving opioid analgesics now exceed deaths from any other drug or drug class, licit or illicit.1 In addition to the adverse health effects and subsequent medical care caused by prescription drug misuse, there are also more subtle consequences of addiction. For some, this path leads to unlawful methods of obtaining drug access via legitimate healthcare providers. 1 Jones CM, Mack KA, Paulozzi LJ. Pharmaceutical overdose deaths, United States, 2010. JAMA 2013;20;309(7):657-659. Linked multiple identities to a single individual Analyzed claims data and medical records for a comprehensive view of behavior Uncovered and stopped illegal activity before more losses were incurred
  2. 2. PAYMENT INTEGRITY PLATFORM Leading healthcare provider exposes medical identity fraud with link analysis technology © 2016 Fair Isaac Corporation. All rights reserved. 2 With a commitment to sifting out fraud, waste and abuse, a large healthcare payer recently engaged with FICO to investigate new ways of uncovering identity fraud being perpetrated by prescription drug seekers. The findings demonstrate the complexity and scale of medical identity fraud as a path to obtaining controlled substances. The prevalence of identity fraud In healthcare, there are two primary types of identity fraud. The first type focuses on the fraudulent use of a legitimate member’s identity. This is identity theft or identity sharing. In these cases, an individual is misusing someone else’s identity to perpetrate fraud. The second type of fraud deals with fictitious identities. These bogus identities are created by fraudsters looking to hide any traceable relationship with the healthcare provider. Fictitious identities can be created very quickly and are often more difficult to detect than cases of identity theft, as there is no true identity that can be used for comparison with the perpetrator (e.g., photos, height, weight, medical history, etc.). With few exceptions, hospitals in the United States cannot decline to treat people with medical emergencies. Regardless of insurance coverage status, individuals will be seen and treated for a variety of ailments. For drug seekers, each visit to the emergency department presents an opportunity to mask their real identity and hide indications of narcotics abuse. By simply changing a few personal attributes, such as first name, address or social security number, drug seekers can create new, fictitious identities with each visit to the hospital. Figure 1: All member, claim, and pharmacy numbers are fictitious Member: 28493088 Claim: 2839472034 Claim: 8392740293 Claim: 1928364034 Claim: 5293846283 Claim: 2844519283 Claim: 3849200173 Claim: 4839280038 Claim: 8374922371 Claim: 8273448291 Claim: 2273845029 Claim: 8395020039 Pharmacy: 5034 Pharmacy: 2704 Pharmacy: 1572Prescriber: 8349 Search: Harris Excluded Pharmacy – Action Pharmacy Inc. Pharmacy: 3859 Pharmacy: 2368 Pharmacy: 2393 Pharmacy: 4586 Member: 97003548 Member: 56342918 Member: 25830048 Member: 13092487 Member: 83002649 SIU Case: 28475022 Member: 99354721 Member: 94352904 Member: 54974203Member: 92836502 Member: 73829405 Link analysis highlights suspicious activity by identifying commonalities between individual identity elements associated with multiple healthcare records.
  3. 3. NORTH AMERICA +1 888 342 6336 FOR MORE INFORMATION LATIN AMERICA & CARIBBEAN +55 11 5189 8267 EUROPE, MIDDLE EAST & AFRICA +44 (0) 207 940 8718 ASIA PACIFIC +65 6422 7700 FICO is a registered trademark of Fair Isaac Corporation in the United States and in other countries. Other product and company names herein may be trademarks of their respective owners. © 2016 Fair Isaac Corporation. All rights reserved. 4185CS_EN 1/16 PDF PAYMENT INTEGRITY PLATFORM Leading healthcare provider exposes medical identity fraud with link analysis technology Tackling costs with analytics FICO consultants worked with the provider to identify potential cases of fictitious identities using the FICO® Identity Resolution Engine, a key component of the FICO® Payment Integrity Platform. Identity Resolution Engine scours multiple data sources to uncover links between supposedly separate identities that share personal attributes or variations of personal attributes. This complex link analysis pinpoints cases that should be prioritized for investigation. The initial identity risk assessment focused on six core identity elements. Based on social network analysis of these elements, a ranked list of potential fraud patterns emerged. Visually, the link patterns were very similar to organized fraud rings, except each member of the ring was actually the same individual — the person perpetrating the fraud. From there, highly suspect identities were compared using supplemental information such as height, weight, surgical history, medical complaint and pre-existing conditions. Medication allergies were also valuable in connecting supposedly separate identities. While some allergy claims, such as specific antibiotics, appeared legitimate, other allergy claims were most likely falsified in order to avoid less desirable pain medications in favor of “drugs of choice.” All of this information was used to further enhance the linkages of identity elements. Connecting disparate data The elements needed to isolate cases of identity fraud were spread across multiple, disparate systems. For example, while prescriptions and claims histories of each identity were accessible from a centralized database, internal service histories resided in separate systems. An internal service history provides details of controlled substances given to a patient after they are admitted to the hospital; it resides in individuals’ medical records. It became immediately apparent that the analysis would need to span both claims data as well medical records. Analysis focused solely on claims data would not have been as effective. In the cases identified during this analysis it was not unusual to uncover hundreds of thousands of dollars in aggregated internal services tied to a single individual. These losses were incurred in order for the perpetrator to get their hands on only a couple hundred dollars’ worth of painkillers. The creation of false identities is a path of least resistance for people addicted to prescription pain meds. The FICO Payment Integrity Platform helps resolve these identities with unique linking capabilities that spot suspicious relationships across identity elements and assess the risk of fraud using predictive analytics. To learn more about adaptive predictive analytics and how they’re applied in the FICO® Payment Integrity Platform, contact us at or 1 888 342 6336.