Computers Key to Fighting Medicare Fraud

Geographic information systems and other technologies offer new hope for reducing government health-care fraud

17 November 2010-On 13 October 2010, the Federal Bureau of Investigation arrested 55 people involved in a scheme to defraud Medicare, the U.S. government's health insurance program for the elderly and disabled, of US $163 million. It was hailed as the largest Medicare fraud bust in U.S. history until a week later, when federal agents took down a separate group, in Florida, that had tried to defraud the Medicare system of $200 million. In both cases, the government had already paid out millions of dollars for medical services that were never provided. Most of the money will never be recovered.

One of the most promising solutions to this problem is the use of geographic information systems, known as GIS. Medical insurance claims are typically organized by patient information, but the geographic data surrounding a patient's medical care may actually tell a more complete story, says Bill Davenhall, a health-care expert at Esri, a company that specializes in GIS. "Analysts don't always see geography as a predictive tool, but it can be very useful," he says.

Fraud investigators already use postal codes to identify suspicious claims, but the geography of Medicare is complex. Medicare covers medical treatments received out of state, and physicians can practice in more than one state at a time, which means both physician and patient could be located in a different state from the clinic filing the claim. "It's not unusual to have six different addresses by the end of the billing process," says Davenhall. With GIS, investigators could narrow the focus down from postal codes to street addresses, which would help investigators catch fly-by-night operations faster.

Incorporating health statistics can make geographic-based models even more powerful, says Davenhall. For example, he says, "a patient flying from New York to Florida for an elective procedure might not raise any red flags, but studies have shown that compliance goes down the farther a patient is from the clinic. So if that patient is going back for follow-up visits every week, that's cause for suspicion."

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