Data warehouse aids fraud cops

'We are more likely and can more quickly address the root cause of a problem because we can see it across all the audits.'

'OPM's Lewis Parker

Henrik G. de Gyor

Each year, the Office of Personnel Management handles more than 310 million federal employee health insurance claims'not all of them legitimate.

But for a team of auditors in OPM's Inspector General's Office, identifying bogus claims or administrative problems resulting in waste was'until recently'a tedious effort.

A new data warehouse is changing that. A year's worth of claims amounts to about 175G of data, and before the move to the warehouse, the files were stored on magnetic tapes. To analyze claims, IG auditors had to scrutinize roughly 100 magnetic tapes to try to detect fraud, waste and abuse in any given year.

The data warehouse stores three years' worth of claims information and has standardized the reporting from Blue Cross Blue Shield'the largest insurance carrier participating in the program.

Using the data warehouse, auditors can quickly review information by individual plan, by state, by region or throughout the entire country, said Jeff Cole, chief of information systems for OPM's Audits Division.

'The initiative combines the use of affordable computer technology with expert knowledge in the field of health benefit analysis,' IG Patrick McFarland told the House Government Reform Committee last year. 'The goal is to develop a data warehouse, employ programwide review strategies and ultimately implement sophisticated data mining techniques to thoroughly analyze the Federal Employee Health Benefit Plans claims payments.'

McFarland said auditors last year reviewed a cross-section of data from $10.8 billion worth of Blue Cross Blue Shield claims, which make up more than 50 percent of all claims. Auditors will further examine more than $22.5 million in improperly coordinated claims from the insurance carrier.

Reviewing all data

OPM developed the system over the past two years for less than $500,000 and expanded the application in the fall, Cole said.

The application is letting auditors review all Blue Cross Blue Shield carrier data to ferret out problems, such as duplicative payments, Cole said. The system now analyzes coordinated benefit claims data, which Blue Cross Blue Shield submits to the government for payment, he said.

In the past, OPM auditors each year audited 15 to 20 of the 65 Blue Cross Blue Shield carriers that submit data. The new system lets examiners audit all 65 in half the time, said Lewis Parker, OPM's data warehouse project manager.

Cole said OPM brought the system online in 2001. Before that, auditors depended on a computer specialist to help run reports.

'We only had one computer specialist and at least 30 auditors, so there was a bottleneck in pulling the information from the tapes,' said Dennis Black, OPM's deputy assistant IG for audits. 'We had to get the information into the hands of the auditors more easily and free up the computer specialists to do other work.'

The auditors analyze 50 localized Blue Cross Blue Shield plans and then enter the data into the system, Cole said. OPM receives claim information from the insurance carrier annually, which also is reviewed by examiners, he added.

Cole said the first report should be done by next month. 'We are looking for examples of where the insurance company charged us too much,' Cole said. 'We can now audit millions of dollars that were overpaid. Before, we didn't have the resources to do it. Auditors also now will have time to look for waste, fraud and abuse in other areas.'

OPM IG officials estimate time savings of about 50 percent because of the data warehouse, which lets auditors perform other analyses.

Cole said examiners are developing a new report that would review certain types of hospital claims. He said this assessment is expected to find at least $6 million worth of erroneous payments.

OPM wants to add other insurance carriers, but it will take more than a year to standardize data formats among companies.

'We are hoping the Health Insurance Portability and Accountability Act helps us standardize data with all carriers,' Cole said. 'We also will try to use Blue Cross Blue Shield as a template for others.'

Auditors also are using the system to verify that carriers have established controls in their claims-processing systems, McFarland said.

The front end of the Web portal runs SAS/IntrNet from SAS Institute Inc. of Cary, N.C. Auditors use an OPM-developed app to run reports. The information is stored and accessed through Base SAS software, residing on a server running Microsoft Windows 2000.

Extra storage

OPM moved the system to a Sun Microsystems Sun Fire V880 server in October. The Solaris server houses more than 1.5T of data. The extra storage makes report processing faster and more consistent, Cole said.

Users enter the system through a common gateway interface to the SAS software. Auditors define the information needed for the report they want to run and the software filters data based on parameters set by the users.

The entire process takes from a few seconds to a few minutes, Cole said. The old way would take days or weeks because senior auditors had to detail the report to a computer specialist, who programmed the mainframe to produce the results.

'The results were inconsistent because auditors set parameters differently,' he said. 'Now, the input and output are consistent.'

An additional upgrade this spring will let OPM do away with the magnetic tapes altogether and transfer data from Blue Cross Blue Shield to OPM auditors using the File Transfer Protocol over a secure line.

The agency plans to buy data-mining software in the spring as well to help auditors scan data even more swiftly and look for trends or patterns.

Another effort will be launching a front-end portal for the system. The new portal will be written in Java and will provide a more consistent appearance and more stable environment, as well as improve security, Parker said.

McFarland said the system has already paid dividends because auditors are conducting more reviews and their analyses are more comprehensive.

'In the past, we would have to go to the different carriers and ask for claims information. It would take weeks to get a reply,' Cole said. 'We can do global audits instead of doing things piecemeal. And it takes only a week to perform the audit, instead of two or three.'


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