State Agencies Use Data Mining To Mitigate Misuse of Health Benefits

February 24, 2015 in News

State and local agencies increasingly are turning to data mining to detect fraud and misuse of government programs, including health benefits, the New York Times‘ “Technophoria” reports.

Details of Data Mining Services

According to “Technophoria,” business intelligence companies — such as IBM, SAS and LexisNexis Risk Solutions — have long-served financial companies with predictive computer modeling services.

Recently, state and local governments have started using such software to analyze their records for fraud. For example:

  • The New York City Human Resources Administration completed nearly 30,000 investigations and identified about $46.5 million in fraud last year — including in government-funded health care programs, such as Medicaid — using multisource data analysis methods to compare its records with those from the LexisNexis database; and
  • Other state agencies used IBM software to identify patterns indicating misuse in benefit programs, including those related to health care.

Reaction

Steven Banks, commissioner of New York City’s HRA, said, “The data mining process is extremely important,” adding, “It allows us to zero in on likely fraud so we don’t divert resources to finding what otherwise might be a needle in a haystack.”

However, other stakeholders have raised concerns about the practice.

Todd Spodek, a lawyer who is representing an individual being charged after data-mining methods identified potential fraud, said, “I think there is a fundamental flaw with relying on data analytics to determine criminal culpability.”

Jay Stanley, a senior policy analyst for the American Civil Liberties Union, said that “lots of questions are raised when governments wade into the Wild West world of commercial data.” He added, “Are the steps being taken to fight that fraud fair, accurate, and are they going to have side effects?” (Singer, “Technophoria,” New York Times, 2/20).

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