For Immediate Release - September 03, 2013

MassHealth Launches New Program to Stop Fraudulent Provider Billing

New predictive modeling system analyzes suspicious billing patterns and freezes payments to providers suspected of fraud or abuse

BOSTON — Secretary of Health and Human Services (HHS) John Polanowicz today announced the launch of an innovative new program that will help detect and prevent provider fraud, waste and abuse in real-time, by freezing payments to providers with suspicious claims, until they are investigated.

“Thanks to MassHealth, Massachusetts is a national leader in health care access for all people, including our most vulnerable populations,” said Secretary Polanowicz. “By adopting these cutting-edge tools, we can more effectively prevent providers from taking advantage of our system, while ensuring that benefits are delivered efficiently and are available for individuals who need them most.”

The new program was launched with support from the Obama Administration and the Center for Medicare and Medicaid Services, which has deployed a similar system for Medicare. The majority of the $5 million project will be reimbursed by the federal government. The system will generate significant cost savings for the Commonwealth and federal government by preventing improper billing, waste, and abuse before it happens. The predictive modeling system builds on the already strong program integrity measures built into the state’s Medicaid claims system to detect anomalies and trends typically identified through post-payment analysis.

MassHealth has a robust partnership with the Office of the State Auditor’s Bureau of Special Investigations and with the Attorney General’s Medicaid Fraud Division to investigate and prosecute member and provider fraud.

“Through our partnership with MassHealth, our office has brought numerous criminal cases of abuse in the Medicaid program and recovered millions of dollars in taxpayer funds,” said Attorney General Martha Coakley. “We are pleased that this innovative new program will provide early detection of fraudulent billing practices and further protect these health care services for those who truly need it.”

When alleged fraud is detected, MassHealth builds a case and refers to the Attorney General or State Auditor for investigation.

“Through collaboration and the leveraging of advanced technology we aim to build the public’s trust in this vitally important program,” said State Auditor Suzanne Bump. “The use of MassHealth’s Predictive Modeling systems in conjunction with the Bureau of Special Investigations Data Analytics Unit accelerates the process of identifying and preventing fraud."  

This pre-payment predictive modeling solution is similar to the fraud prevention analysis employed by private sector financial and credit card industries. Using sophisticated algorithms to analyze claims, the system builds provider profiles of suspicious billing patterns and assigns risk scores to potentially inappropriate claims. Before payment can be released, a team of specialized investigators review each high risk claim and suspicious provider. When fraud is suspected, MassHealth works collaboratively with law enforcement agencies to seek resolution. 

“MassHealth is focused on bringing the same innovative thinking to our program integrity efforts that we bring to our work to expand access, improve quality, and reduce costs,” said Acting Massachusetts Medicaid Director Kristin Thorn. “This system will allow MassHealth to stop the cycle of pay and chase by blocking the payment of suspicious claims before the check goes out the door.”

Through changes to Health Information Exchange Integrated Eligibility System (HIX/IES) as part of the Affordable Care Act, MassHealth will have more tools to continue to enhance program integrity. Planning is currently underway to develop an innovative, Health Information Exchange Integrated Eligibility System (HIX/IES) that will provide MassHealth with access to real-time state, federal and private databases to enhance data verification checks.

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