HHS approves Florida data mining waiver to identify Medicaid fraud

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U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius has approved the state of Florida’s Medicaid waiver request to help fund a demonstration program that will allow the state’s Medicaid Fraud Control Unit (MFCU) to mine Medicaid Management Information System (MMIS) data to identify cases of potential Medicaid fraud.

“To fight healthcare fraud, we need to coordinate all of the resources and data we can muster,” said Sebelius. “By allowing the state of Florida to use more information to find potential fraud in Medicaid, this waiver will improve Florida’s ability to effectively identify and combat fraud and abuse.”

As part of HHS' efforts to coordinate the fight against fraud across the U.S. healthcare system, including Medicaid and Medicare, data mining will allow Florida’s MFCU to sort electronic claims through the use of statistical models and technologies to uncover patterns and relationships, according to HHS. Using the identified patterns, investigators can review Medicaid claims activity and history to find abusive or abnormal use of services and billing that may be potentially fraudulent.

Currently, state MFCUs are prohibited from using federal Medicaid matching funds to detect potential fraud through routine claims review procedures such as screening of claims, analysis of billing practice patterns or routinely verifying that billed services were actually received by patients, since these functions are a primary program operation function of the state Medicaid agency, the agency said. Instead, MFCUs rely on referrals from the state Medicaid agency. The waiver approved will allow the Florida MFCU to use federal matching funds to apply electronic data mining tools to identify potential fraud.

The Centers for Medicare & Medicaid Services will monitor the progress of this waiver in conjunction with the HHS' Office of Inspector General, which has oversight of MFCUs.