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Fraud identification moving to analytical contractors

Pharma Compliance Alert, November 28, 2007

More than 20 firms are competing for a chance to slice and dice health data to look for improper payments, according to James Sheehan, Medicaid Inspector General for New York.

Sheehan, speaking at this month's Pharmaceutical Regulatory and Compliance Congress, told industry insiders that fraud identification is moving from law enforcement agencies to program agencies and analytical contractors.

In the past, criminal prosecutions were the main focus. In order to get a criminal conviction, however, prosecutors had to allow companies to commit a fraudulent act, then collect evidence. Data analysis will allow the companies and the government to identify potential vulnerabilities.

Pharmacies are the best place to work on a data mining system, Sheehan said, because they produce the largest number of claims and have the best coding. Sheehan expects Medicare Part D to be a great source of prescription data. However, the information is not yet reconciled or integrated. Once it is, it will provide a powerful tool to look at patterns of care, off-label use, and marketing.

Data mining also provides an opportunity for pharmaceutical companies to demonstrate improved outcomes in a population within a specified interval, according to Sheehan.

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