1. 1/ October 2008 / SGS INTERNAL Network Detection and Analysis Karen Painter Sandra Dorman Eastern and Pennsylvania Benefit Integrity Support Centers

2. 2/ October 2008 / SGS INTERNAL Introduction

3. 3/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Traditional Data Analysis Approaches Individual providers High dollar billers Spike reports Top procedure codes Individual specialties

4. 4/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Current Fraud Landscape Fraud schemes are evolving and more sophisticated Medical management organizations Organized crime rings Identity theft

5. 5/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Traditional Approach

6. 6/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Our Approach - FUSION Model Fraud Detection Utilization Statistical Models Integration Overpayment Network Analysis

7. 7/ October 2008 / SGS INTERNAL Network Detection Examples

8. 8/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Utilization Detection - Beneficiary Sharing Started with a known provider group suspected of sharing beneficiaries Gathered all data on the beneficiaries Identified 3,947 providers and 1,487 beneficiaries Identified 274 providers and 541 beneficiaries through a dense cluster analysis

9. 9/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Beneficiary Sharing - Analysis and Findings

10. 10/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Utilization Detection - Husband/Wife Found 1,800 instances of husband/wife beneficiaries –Receiving the same procedure –With the same diagnosis –On the same date of service –With the same provider 48 providers rendered services to these pairs One pair had a total of 22 different diagnosis codes Total Paid $425,256

11. 11/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Husband/Wife – Analysis and Findings HIC Bene First Name Bene Last Name Bene Gender Desc Claim First Date of Service Rendering Prov Name Referring Prov Name Line Dx Cod eCPT Bene Current Street 1 Adr Bene Current Street 2 Adr Paid Amt HIC1JaneDoeFEMALE01/05/07Physician A 739098927 123 Main St APT 3H$45.54 HIC2JohnDoeMALE01/05/07Physician A 739098927 123 Main St APT 3H$45.54 HIC3MinnieSmithFEMALE01/02/07Physician BPhysician C739398942 987 Smith St APT 4G$38.85 HIC4MickeySmithMALE01/02/07Physician BPhysician C739398942 987 Smith St APT 4G$38.85 HIC5FannieJonesFEMALE11/28/07Physician D 428099213 456 South St APT C-4$55.69 HIC6FredJonesMALE11/28/07Physician D 428099213 456 South St APT C-4$55.69

12. 12/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Utilization Detection - Ambulance Identified Beneficiaries with transports of 5 or more different ambulance companies per year Identified transports to nowhere Currently under law enforcement investigation

13. 13/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Ambulance – Analysis and Findings

14. 14/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Utilization Detection - Laboratory Laboratories identified through ‘traditional’ spike models Analysis of referring providers uncovered suspect relationships Comparison of laboratory claims/diagnosis and treatment by the referring provider uncovered inconsistencies

15. 15/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Laboratory – Analysis and Findings Trend of laboratory and referring provider relationship

16. 16/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Utilization Detection - Physical Therapy Started with all beneficiary and provider combinations for PT (97110) Narrowed dataset to instances where beneficiaries saw 5 or more providers for 97110 within 1 year Identified a set of 522 providers Identified 318 beneficiaries

17. 17/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Physical Therapy – Analysis and Findings Trend of Diagnosis Code for Group billing PT & OT

18. 18/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Utilization Detection - OT and PT Same DOS Beneficiaries who received occupational therapy and physical therapy on the same day Analysis on 3 month period A total of 308 providers were identified A total of 753 beneficiaries

19. 19/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis OT and PT Same DOS – Analysis and Findings

20. 20/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Utilization Detection – Identity Theft Approach was to look for beneficiaries that had a sudden increase in the number of carriers Looked for a spike in payment for our beneficiaries out of state Looked for out of state beneficiaries in our jurisdiction

21. 21/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Identity Theft – Analysis and Findings

22. 22/ October 2008 / SGS INTERNAL Statistical Models

23. 23/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Spike Model Goal is to identify providers with a large increase (spike) in dollars paid Compare one recent month with a calculated baseline average (Previous 6 or 12 months) Identify providers with a 100% increase and a minimum of $50,000 paid in current month

24. 24/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Spike Model - Example

25. 25/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Outlier Model Goal is to identify providers that are not like their peer group (i.e. same specialty) Two complex variables are considered: –Dollars per patient –Patients per day

26. 26/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Outlier Model – Dollars per Patient Example Mean = 148.29 Median = 110.90 Standard Deviation = 106.09 Threshold for Outliers using Quartile Method = 403.28 Threshold for Outliers using a Z-Score of 2 = 360.47 Threshold for Outliers using a Z-Score of 3 = 466.56

27. 27/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Outlier Model – Patients per Day Example Mean = 9.88 Median = 6.79 Standard Deviation = 9.58 Threshold for Outliers using Quartile Method = 28.49

28. 28/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Trend Model Goal is to find providers that may not have ‘spiked’ but have had a statistically significant increase over a six month period Trend is evaluated on two complex variables –Dollars per patient –Patients per day

29. 29/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Trend Model – Dollars per Patient Example

30. 30/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Trend Model – Dollars per Patient Example Trend Model Dollars per Bene for a Specialty 18 Provider

31. 31/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Static Model Goal is to identify providers that consistently bill the same set of procedure codes For example: office visit, blood test, urine test, for each beneficiary Potential to expand to diagnosis codes or other parameters

32. 32/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Static Model - Example

33. 33/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Logistic Regression Model Goal is to identify providers with a similar profile of known fraudulent/abusive providers Create a model based on historical data and then apply this model to current data Providers with patterns similar to providers already found to be fraudulent are flagged for review

34. 34/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Logistic Regression Model - Example

35. 35/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Integration of Statistical Models ProviderSPC Spike Aug07 Trend - $$/Bene Trend - Benes/Day Outlier - $$ /Bene Outlier- Benes/ Day Static Utilization of CPT CodesComplaintsSUM$$ PdComments A111 1 13 $ 626,121Active Case B081 113 $ 173,631 C18 11 2 $ 142,829 D301 12 $ 130,000 E65 11 2 $ 150,000 F111 12 $ 120,355Active Case G83 1 12 $ 109,722

36. 36/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Our Approach - FUSION Model

37. 37/ OCTOBER 2008 / SGS INTERNAL Network Detection and Analysis Results 70+ Fraud Investigations 15 Referrals to OIG Approx $5.1 million identified overpayments Approx $4.2 million in pre-payment savings

38. 38/ October 2008 / SGS INTERNAL Questions??

39. 39/ October 2008 / SGS INTERNAL SafeGuard Services, LLC 225 Grandview Avenue Camp Hill, PA 17011 717 975 4434 Karen.L.Painter@eds.com