New Fraud and Abuse Management System for clean medical billing

Atlanta 14 August 1998 Medaphis Corporation is the first commercial company, without any relation to the insurance business, to issue an innovative software solution in order to detect and prevent errors in medical billing claims. The Atlanta based provider of software and billing services has partnered with IBM to offer a specialized tool to the health care market for claims data mining, reporting and analysis tasks. The Fraud and Abuse Management System (FAMS) forms part of a comprehensive Physicians Billing Compliance Risk Management programme.

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Medaphis Corporation is the first commercial company, without any relation to the insurance business, to issue an innovative software solution in order to detect and prevent errors in medical billing claims. The Atlanta based provider of software and billing services has partnered with IBM to offer a specialized tool to the health care market for claims data mining, reporting and analysis tasks. The Fraud and Abuse Management System (FAMS) forms part of a comprehensive Physicians Billing Compliance Risk Management programme.

The Medaphis' Physician Services division will implement FAMS as the cornerstone of the computer based monitoring programme to provide an accurate and regulated procedure for claims billing. As such, the each year more than forty million medical claims, which are submitted by the division to insurance carriers and intermediaries on behalf of the health care professionals, properly will be reviewed by the FAMS tool. The system makes use of advanced data mining technology and statistical models for the identification of unusual patterns in claims data.

As a result, the software programme generates reports to compare the specific billing patterns of a given client with the Medaphis' substantial base of health care providers to detect aberrant billing patterns which call for a more profound investigation. According to General Manager Ben Barnes of the IBM Global Business Intelligence Solutions unit, data mining constitutes an indispensable technology because of the large quantity and the extreme complexity of the current billing data structure. Manual control simply has become far too insufficient to detect the subtle practices, applied in most fraudulent claims.

The FAMS programme has been designed to assist insurance companies, health management organizations (HMOs) and risk-bearing health care professionals to timely identify intentional erroneous claims, to indicate suspicious providers and to minimize the temptation for committing abusive medical billing practices. The data mining technology precisely allows to rapidly search through a vast amount of claims, whereas an unfailing and very sensitive scoring methodology immediately highlights every deviating billing behaviour.

At the end of 1997, IBM and Medaphis started their research on the use of FAMS for health care professionals and their billing agents. The data mining, analysis and reporting capabilities offered by the tool, fit nicely into the Physicians Billing Compliance Risk Management programme. This initiative has co-operatively been set up by Medaphis, the Graham Company, and CNA International to protect physicians against civil fines and penalties, which likely would be imposed by the federal, state or local government in case of billing errors, signalized by a commercial payer. The programme also covers for defence and audit costs.


Leslie Versweyveld

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