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New York County Tries Tech To Cut Medicaid Fraud

IBM tools will help government workers identify irregularities that require further investigation.

IBM's $1 billion information management initiative, announced Thursday, is getting an early acid test New York's Rockland County, where Big Blue's technology is being used in a pilot program aimed at busting Medicaid fraud.

"In Rockland County, we spend $1 million a day [on Medicaid]," Rockland County Executive Scott Vanderhoef said, adding that 49 percent of pharmacy claims are questionable and 19 percent of all Medicaid claims have some sign they are inaccurate or fraudulent. Based on those figures, he said if even half of the questionable claims in his state were identified as false, New York State could save as much as $4.5 billion a year.

IBM's information-on-demand software products, which federate, sort and analyze numeric, textual, video, special and other data, help government workers identify irregularities that require further investigation.

"We should have done it so long ago, but the software wasn't there," Vanderhoef said. "I think this is one of the things that may change the Medicaid process, get everybody on their best behavior and end up saving the taxpayers money."

With the pilot program it's going to be more difficult for someone to charge prescription drugs to an account of someone who had Medicaid but has been dead for awhile, he said. It will also be obvious when an internist claims to have seen 9,000 people in one day, he said.

The state has been investigating and prosecuting fraud in the government-paid health insurance programs for indigents, but Vanderhoef said the pilot program will help prevent payments for bogus claims so the state doesn't have to try to recoup them after the fact.

The same techniques and software are being applied to law enforcement in New York City, said Steve Mills, senior vice president and group executive for the IBM software group.

Mills gave an example in which a crime victim recalled only that a perpetrator had a tattoo of the Grim Reaper and that someone uttered the nickname "Shorty." With federated data from summons, arrests, parolee information and more, IBM's software can sift through millions of pieces of information, including addresses and aliases in real time to help police arrest the perpetrator more quickly than they would have done otherwise.

The software and services are being applied to shipping, finance and a host of other industries and will likely be expanded in the future, if Mills was correct when he said that information management represents a $69 billion opportunity with a 18 percent compound annual growth rate by 2009.

Mills said that globalization, mergers, acquisition and regulatory compliance are among the factors converging to drive demand for new insight and technologies to compete and to cope with information overload.

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