The IBM Counter Fraud Discovery Asset for Medical Fraud is the latest version of the Fraud and Abuse Management System (FAMS) asset and helps payers identify providers that may be submitting claims and potentially engaging in fraudulent, abusive or wasteful practices. It uses advanced analytics to detect healthcare fraud and abuse.
Notes on Deployment
- Target Industries: Healthcare Payer, Government (Medicaid, Medicare, Workers Compensation)
- Client Size: Any
- Typical Sponsors: CFO; Risk Manager, Head of Special Investigations Unit; Program Integrity coordinator
- The solution contains pre-built fraud detection models that can be used to accelerate time-to-value.
- FAMS can be used to detect suspicious behaviors before money is paid (near real-time) or retrospectively.
- Uses advanced analytics and statistics, not queries.
- Contains pre-built behavior models that can be adapted in hours for a payer organization.
- Powerful analytics are presented in easy-to-understand format for investigators.
- Unlike many competing solutions, FAMS does not require users to have advanced degree in statistics.
- Other firms cannot analyze your claims data on demand, using pre-built behavior models.
- Detects multiple behaviors and schemes simultaneously
- Moves analysis from claim level to provider level
- Shortens the time to investigate and recover funds
- Measures fraud scientifically
- Using the FAMS Diagnostic, you can obtain a thorough analysis of your highest risk area
- Get tangible cases with detailed reason for selection
- Get a positive ROI from the diagnostic work
Detecting and stopping income tax refund fraud
Challenge:
New York wanted to enhance current audit case selection methods for detection of audit issues at the time a return is processed.
Specific audit programs include Earned Income Credit, Dependent Child Care Credit, Itemized Deductions, Wage/Withholding, and Identity Theft.
Solution:
IBM’s fraud analytics solutions. Our solution applies business rules and predictive models to categorize and score returns nightly and identifies the ‘next best case’ for audit selection. In addition, a separate web based portal provides screening and resolution of cases.
Results:
$2 billion increase in refund denials over a 9 year period.
Increased screener and auditor productivity.
“Honest” taxpayers have refunds quickly processed with less hassle.
Finding abusive activity in travel & entertainment expense reporting
Challenge:
The high volume of expense reports presented a resource and efficiency challenge to their timely and accurate processing.
IBM needed a more streamlined method for identifying expense reporting errors and violations.
With expense submissions of $186M USD expense of 30K individual vouchers per month for 318k employees. These volumes represented a challenge to monitor effectively for potential errors without the use of analytics.
Solution:
The IBM Global Business Services team implemented the IBM Risk and Compliance Audit Tool. This tool provides a streamlined method for identifying expense reporting errors. It provides auditors with the ability to identify areas of risk within internal business controls.
Results:
Effective monitoring of 3.8M vouchers and $2.2B yearly.
1300 exams per quarter.
45% had some sort of policy non compliance.
5% of the total # had Bus Conduct Guideline violations/fraud and were referred to Internal Audit for investigation.
Finding abusive activity with employees and vendors
Challenge:
The high volume of accounts payable data proved challenging for this leading Telco client. Issues with disparate systems as well as challenges with data quality.
Due to many mergers and acquisitions, this company needed to reduce cost, identify policy issues, and identify fraud.
Solution:
The IBM Global Business Services team implemented the IBM Risk and Compliance Audit Tool to allow for continuous controls monitoring. This tool provides a streamlined method for identifying fraud, erroneous payments, and policy issues. It provides auditors with the ability to identify high risk behavior with in the Accounts Payable process.
Results:
Improper approvals 5 employees approx $850K.
Expired statement of works allowed for $6M to be invoiced with out terms and conditions.
50 high risk cases turned over to IA and investigations representing approx $700M in abuse.
Dalam Negeri (LHDN) - Enhancement of Audit Case Management Capabilities
Challenge:
The Inland Revenue Board Of Malaysia (LHDN) Improve internal compliance processes and enhance tax revenue, the Initiative is targeted at detecting tax non-compliance of individual and company income tax.
Solution:
A full IBM solution IBM’s fraud analytics solutions. By creating a DWH (or data repository) to provide a common store for data from various silo’ed systems and leveraging off this data with predictive modeling, the system also provided case management capabilities for audit/investigative officers to create electronic cases.
Results:
$1-2 million increase (5%) in collections (based on audits/cases) in the first 12 months.
A large internal saving due to improved identification/analytics.
No increase in staffing levels.
Optimizing collection of delinquent tax debt
Challenge:
The Department of Tax & Finance (DTF) was asked by the Governor to increase collections to reduce the state’s budget deficit, while maintaining a sense of fairness by pursuing all debtors with equal vigor. Yet, DTF had limited resources to perform the required work.
Solution:
IBM’s fraud analytics solutions. Our solution uses new analytical methods invented by IBM Research to predict collectability, recommend next best action, and optimize assignment of work to agents.
Results:
$83 million increase (8%) in collections in first 6 months.
22% increase in $’s collected per warrant; 9% fewer warrants issued.
No increase in staffing levels.