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GCN Home > 02/09/04 issue

Data warehouse aids fraud cops

By Jason Miller, GCN Staff

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.