Data analytics strengthens OIG process

To increase speed and accuracy in detecting fraud, waste and abuse (FWA), the OIG has focused on growing the agency’s data analytics toolset and processes available to investigators. Through redistributing available resources and restructuring, the OIG established a team focused on increasing access to this vital skill set.

The OIG has found data analytics to be one of the most effective uses of state resources, allowing investigators to identify risks program-wide instead of relying on individual referrals to identify misuse by a single provider. For example, investigators can use an algorithm, developed by studying the behavior of previously flagged providers, to rapidly uncover systemic issues across managed care organizations and  Medicaid providers. 

A key example of the benefits of this analytics-based approach can be found in the agency’s recent fraud detection operation (FDO), which examined home health agencies and identified four providers exhibiting behaviors that indicate potential fraud, waste or abuse, including:

• Outpatient overlap - billing for home health services while the client was in an inpatient facility.
• Exceeding unit limitations - a single claim line that exceeded 24 hours.
• Impossible hours - services exceeding 24 hours on a single date of service.

An FDO is the result of multiple OIG units’ review and analysis of large volumes of data to identify providers who appear as statistical outliers among their peers. Investigators then collect and evaluate additional evidence and information to determine if an outlier’s status is attributable to a possible program violation. To assist in the review, providers must supply records requested by OIG investigators, make staff available for interviews, and cooperate with the investigation. The initial record review for the providers is still in progress, and based on the findings, each case may be referred to a full investigation if needed.

During the first quarter of fiscal year 2023, the Data Operations team received 241 data requests and completed 292 requests for data. Additionally, 53 algorithms were executed by the Fraud Analytics team, and four new algorithms were developed to detect fraud, waste or abuse.    

The OIG plays a vital role in protecting Texas Medicaid funding, and as cases continue to become more complex, the state will need to increase investigatory resources and locate personnel capable of developing the tools needed to protect Texas taxpayer dollars.