AIT Offers New Technology as Solution to National Crime Wave: Healthcare Fraud

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AIT urges the use of the latest investigative technology to detect and apprehend perpetrators, lower overall medical care costs, and provide greater patient safety.

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The key to success in health care fraud cases, as in all financial investigations, is the ability to leverage advanced technology that allows an investigative group to conduct a comprehensive analysis of all the data in a case in a timely manner.

According to the National Health Care Anti-Fraud Association, fraudsters, scammers and organized criminal gangs are bilking the U.S. health care system of as much as $100 billion per year. Health care identity theft has come to dominate all other crimes in the sector; it commonly occurs when someone with legitimate access, such as a hospital administrator or a doctor’s assistant, sells patient information to organized criminal groups. Increasingly, these groups are hacking into digital medical records in order to steal money from the $450 billion, 44-million-beneficiary Medicare system.1

While insurance companies and the federal government are the ultimate targets of these schemes, per Susan Deehan (Chairwoman and CEO of Actionable Intelligence Technologies, the nation’s leading supplier of solutions for financial investigations), criminals’ actions victimize everybody involved in the health care system—especially the patient. Victims of medical identity theft may receive the wrong medical treatment, find that their health insurance benefits have been exhausted or their policy cancelled, or learn that they could become uninsurable for both health and life insurance coverage. The effects of this type of crime can plague a victim’s medical and financial status for years. Patients with serious medical conditions who do not have the help of family members competent enough to fight the endless red tape in order to prevail may never recover their medical treatment plans and benefits.

And identity theft, Deehan points out, is by no means the only type of medical care fraud going on in the U.S. today. A significant amount of health care fraud is committed not by organized crime groups but by health care providers, themselves. While the overwhelming majority of doctors, hospitals and other care providers are honest and dedicated, the sheer size of the U.S. medical care system provides enticement for those who are not. The Association of Certified Fraud Examiners (ACFE) notes that national health expenditures in the U.S. reached $2.6 trillion in 2010—17.9% of GDP—and are expected to grow 6.2% per year from 2015-2021. According to ACFE, the most common health care provider fraud schemes include:

●    Billing for services not rendered.
o    Billing for Durable Medical Equipment not delivered.
o    Up-coding for multiple morbidities.
●    Billing for a non-covered service as a covered service.
●    Misrepresenting dates of service.
●    Misrepresenting locations of service.
●    Misrepresenting provider of service.
●    Waiving of deductibles and/or co-payments.
●    Incorrect reporting of diagnoses or procedures.
●    Over-utilization of services.
●    Corruption (kickbacks and bribery).
●    False or unnecessary issuance of prescription drugs.2

The bad news, per Deehan, is that fraudulent activities that are detected are just scratching the surface. Some experts estimate that the unknown percentage of health care fraud which is never detected may actually exceed what is known. Medical payment systems use various “big data” modalities to detect improper payments and fraud. Unfortunately, these techniques have the unintended consequence of training fraudsters how to properly submit cases so that they’ll be paid. Ultimately, any time a human in the loop is willing to lie and certify that a patient was seen, a treatment was provided or a device was given to a patient, that fraudulent transaction will be undetectable by any high-tech computer system. In this way, our medical systems are being exploited for massive amounts of fraudulent transactions, undermining the system and dramatically raising costs for all stakeholders. Due to the sheer volume and complexity of these cases, agencies are reluctant to invest the necessary resources to investigate such activities on a scale necessary to measure the actual fraud. Other industries, such as credit cards, set an acceptable level of fraud loss at 1/10 of one percent, or one basis point, and they spend the money necessary to detect, investigate, measure and prevent fraud. The health care industry has not been willing to invest in the resources necessary to drive such fraud down to a less devastating level, in large part because it’s primarily taxpayer money that’s being lost.

To help strengthen the ability of law enforcement agencies to combat white-collar crime—including health care fraud—AIT has developed a tool called “Comprehensive Financial Investigative Solution” (CFIS), which allows an investigator to process and analyze financial records exponentially faster and more accurately than would be possible using manual methods. CFIS represents the most cost-effective way to detect, measure and investigate “unknown” health care fraud and facilitate recovery of stolen money.

Investigators using CFIS technology, per Deehan, can perform data entry and analysis in hours and days that would otherwise take months and years using conventional methods.

“The key to success in health care fraud cases, as in all financial investigations, is the ability to leverage advanced technology that allows an investigative group to conduct a comprehensive analysis of all the data in a case in a timely manner. This gives the agency the ability to successfully win cases that would otherwise either be greatly curtailed, discontinued or defeated at trial.”

About Actionable Intelligence Technologies:

Headquartered in Dulles, VA, award-winning Actionable Intelligence Technologies is the nation’s leading supplier of solutions for financial investigations. AIT’s customers include the New York Attorney General’s Office, United States Attorney’s Office, the United States Secret Service, the United States Postal Inspection Service, the Department of Securities, the Securities and Exchange Commission, the Federal Trade Commission, and other important state agencies, as well as the Miami-Dade Police Department, the United States Department of Agriculture, numerous commercial and international forensic accounting firms, and many others. Founded in 1998, AIT is dedicated to helping financial investigators make our country a safer place to live. AIT’s mission is to fight financial crime by delivering the technology and expert knowledge necessary to detect, investigate and permanently dismantle the criminal organization. References are available on request. For more information, visit

1.    Kavilanz, Parija, “Health care: A ‘goldmine’ for fraudsters,” CNN Money, January 13, 2010.

2.    Piper, Charles, “10 popular health care provider fraud schemes,” Association of Certified Fraud Examiners, January/February 2013.

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Karla Jo Helms
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