Roll yer own…

Nicholas Bagley at the Incidental Economist passes along a clear case of fraud, waste and abuse at a massage clinic.  He then laments the oversight process failing to catch the fraud at a low level and writes a simple, elegant paen to informatics that is completely useless:

What’s demoralizing is the familiarity of this story. Back in 1997, the D.C. Circuit issued another opinion involving a Washington, D.C. physician who claimed he worked more than 24 hours in a day. Any halfway-sophisticated computer system should have uncovered fraud this blatant. Well over a decade later, however, Wheeler was able to do exactly the same thing. Even then, it took an informant’s “tip” to clue officials into the fraud.

A good computer program can investigate oddities and identify outliers. It can’t prove fraud or even get a 2 sigma estimate of fraud.

There is something that he is missing.  Claims payment and claims processing rarely reflects reality, especially when services are performed by mid-level clinicians.  We saw this with the recent release of CMS Medicare claims data.  Some of the highest paid individuals were truly performing all the services that they were getting paid for.  However, others were medical directors of large studies or claims rolling up to a single NPI or Medicare ID:

  • Claims rolling up to a provider’s NPI or Medicare ID.  Non-MD/non-D.O. clinicians such as Certified Nurse Practicioners, Physician Assistants, Master and Doctorate level Physical Therapists etc. often will roll their billing up to a doctor’s Medicare billing number.  This means we can’t do a simple time management bullshit detection study based solely on “This provider is claiming he is doing 17 Medicare Part B procedures a day.  Each of these procedures takes 30 minutes… IMPOSSIBLE”.  That type of first level analysis might identify odd situations, but most will be explained by seeing three or four CRNPs/PAs doing most of the work that the doctor than bills for.

The story that Bagley flags in his post is for a massage clinic.  Assuming they are billing for therapeutic and rehabilitative massages (a legitimate billing category), most of the providers who are actually performing the massages are certified massage therapists or atheletic trainers who are loosely suprevised by a single doc.  It is quite possible that five, six, or seventy people are billing under a single claim number so seventy hours of compensated care can be provided in a single day.  I know when I tweaked my ankle and needed physical therapy, the billing was done by an orthopedic surgeon who I saw once for eight minutes and then I worked with a great therapist for the next eight weeks.  Every session I had, I saw at least four therapists on the clock with patients. 

An automated outlier detection system is useful.  But it won’t be the end all and be all of fraud detection and prevention.  Medical billing is too byzantine and convoluted for that.

28 replies
  1. 1
    Someguy says:

    Fraud at a massage clinic? That’s terrible.

    I was expecting a happy ending to that story.

  2. 2
    Richard Mayhew says:

    @Someguy: Try the beef and remember to tip your waitress

  3. 3
    askew says:

    As someone who works with healthcare fraud, this entire post is so true. Trying to identify a unique provider based on the number of different types of IDs and various claims systems is what I do all day. It’s kind of a nightmare.

  4. 4
  5. 5
    gwangung says:

    As someone who works with healthcare fraud, this entire post is so true. Trying to identify a unique provider based on the number of different types of IDs and various claims systems is what I do all day. It’s kind of a nightmare.

    Fruit of the free market, doncha know….

  6. 6
    Richard Mayhew says:

    @askew: I’m sorry —that job sucks.

    I’ve spent too much time in my career trying to match up addresses across half a dozen domains, so I don’t want to think about matching NPI to SSN to TIn to local propiertary ID to taxonomy to birthmarks

  7. 7
    askew says:

    @Richard Mayhew:

    I’ve spent too much time in my career trying to match up addresses across half a dozen domains, so I don’t want to think about matching NPI to SSN to TIn to local propiertary ID to taxonomy to birthmarks

    Addresses are just as bad as matching IDs. I weep when the project I am working on involves getting unique providers with 1 address.

  8. 8
    max says:

    An automated outlier detection system is useful.

    The Wire:

    Nextgov came across a fascinating new software the Secret Service will be deploying: a sarcasm detector. The software can actually detect much more than that: it is meant to investigate a number of emotions, by examining social media. The Secret Service is software that will watch social media users in real time, collecting everything from “emotions of Internet users to old Twitter messages.”

    Secret Service officials have said the software will “synthesize large sets of social media data” and “identify statistical pattern analysis.” The sarcasm watcher will help detect “false positives,” presumably separating real threats from bad jokes. It also has the ability to send notifications to users, but considering it’s the Secret Service, we wouldn’t expect (or want) to see a DM from them anytime soon.

    [‘Well, *I* certainly feel safer already.’]

  9. 9
    KG says:

    as a lawyer, it’s not uncommon to bill more hours than you actually work. part of it is rounding (lawyers typically bill in 6 minute increments – so 15 minutes becomes 18 minutes), part of it is the ability to double bill items (such as, I spend all day at a mediation, while I’m waiting for the mediator, I draft a letter on another case), part of it is having a firm policy for billing a certain amount for particular things (one firm I worked at had a rule that you never bill less than .3 hours on something). so, I could see how a doctor could do the same thing. but 24 hours in a day is just stupid.

  10. 10
    Richard Mayhew says:

    @askew: yeah. I’m spoiled. Our address data internally is well curated, highly structured, and we own the data so when formatting changes, we can do it ourselves. We have some control and knowledge about our data set. however, when we have to play nicely with our state regulators, their data set is not controlled by them; it is controlled by the docs so the following addresses are all considered “valid”
    123 Main Street
    123 Main St
    123 E. Main St
    123 East Main Street
    Suite 100 123 East Main Street
    1st Floor 123 East Main Street
    Main Street and Subsidiary Avenue
    500 Big Town Commons

    Same fucking location, all on the same file without any coherent crosswalk to a shared identifier.

  11. 11
    Richard Mayhew says:

    @KG: But to use the law example — if you have three paralegals working for you, they roll their billing up to your fictitious Lawyer ID Number so 30 billable hours in a day is not hard to achieve under a single fictitious Lawyer ID number

  12. 12
    japa21 says:

    The key to whether or not fraud is involved, in those case you talk about Richard, is the use of modifiers.

    If the codes being billed are for full MD services, then there is an issue. Generally speaking, various mid-level providers are paid at a level less than full MDs.

    If PAs, CNPs, PTs and OTs are performing the services but the claims are not coming in that way, then fraud is involved.

    Additionally, claims are to show the name of the specific provider as well as the billing provider. Again, if services are being rendered by a mid-level but the name is not included, there is the potential for fraud.

    As you point out, a practice, be it a massage clinic, a PT office, a large medical group or a hospital will have an NPI and TIN exclusive to that practice, and if the reimbursement goes to the practice, those are the only numbers that count. Each of the individual providers will have their own NPI, but that is somewhat irrelevant.

  13. 13
    jl says:

    Why are the claims rolled up into one MD’s ID?
    Shouldn’t the MD bill for whatever low level on call or consulting stuff, and the actual providers bill?
    Is it just easier to do it that way? Something related to an MD’s order required for reimbursement? No reimbursement codes for non-MD providers? What?

  14. 14
    scav says:

    @Richard Mayhew: Lord, you haven’t even waded into the non-standard part of the address involving offices in larger buildings. This and general ID DB cross-walk building was sooooo much of my life . . . . ZIPS to FIPS! Cass certified!

    eta oh, you did at the bottom, front-loaded which is the worst place too!

  15. 15
    japa21 says:

    @jl: Actually, in many of these cases, it is the practice doing the billing, not the providers. Now, the practice may well be under the physician’s name, usually with an SC, LLC, or some such after the name. But it is the practice billing for the services rendered by the lower level provider.

  16. 16
    Trollhattan says:

    O/T but while amusing myself googling “Alabama man” I found this doozy.

    Tuesday is the first test of Alabama’s voter ID law – and the state’s Republicans are desperate to dig up some voter fraud. So desperate, in fact, that they’re offering a $1,000 reward to anyone who helps them find any.

    They haven’t succeeded yet. But the ID law has already stopped at least one legitimate voter from casting a ballot.

    Bill Armistead, the Alabama GOP chair, wrote on the party’s website Monday that Republicans will fork over the cold hard cash to anyone who provides “information that directly leads to a conviction of a felony for voter fraud.” Signs saying “Reward – Stop Voter Fraud,” and directing people to call a toll-free hotline, will be placed at polling sites around the state both for Tuesday’s primaries and November’s general election, Armistead added.

    The party isn’t likely to be on the hook for a big payout. A detailed analysis of election-fraud cases conducted by News 21 in 2012 and going back over a decade, found just one isolated case of voter impersonation fraud, the kind that would be stopped by voter ID.

    A call made Tuesday morning to the hotline number went to the Alabama Republican Party office. Zach Bowman, the party’s director of voter engagement, said reports of problems had already come in. Was this the elusive voter fraud, at last? Well, no, said Bowman. It was just a few polling places that hadn’t opened on time. Was there a concern that the monetary reward could cause some people to be overzealous in looking to find voter fraud, potentially causing problems for legitimate voters looking to cast a ballot?

    “I’m sure that would always be a concern,” said Bowman, adding that the goal was simply to ensure that polling places are enforcing the ID law correctly.

    Democrats questioned the incentive strategy.

    “If you have to put $1000 out there, its almost like you’re trying to get people to make something up,” said Nancy Worley, the chair of the state Democratic party. Worley accused Republicans of “trying to stir up an issue that doesn’t exist.”

    Voter fraud may be hard to find, but it didn’t long Tuesday for the ID law to disenfranchise a valid voter. Willie Mims, 93, showed up to vote at his polling place in Escambia County Tuesday morning. Mims, who is Africa-American, no longer drives, doesn’t have a license, and has no other form of ID. As a result, he was turned away without voting. Nor was Mims even offered the chance to cast a provisional ballot, as the law requires in that situation.

    But, that’s not the only right being oppressed today in Alabama.

    ALABASTER, Ala. (AP) — An Alabama gun rights supporter who took a loaded pistol to the polls got to vote, but only after putting the weapon in his pickup truck.

    John David Murphy wore his holstered 9 mm handgun and two ammunition clips into First United Methodist Church of Alabaster when he went to vote in the Republican primary Tuesday. The church, like other precincts, had a sign in the door saying firearms are prohibited. But Murphy argued with a poll worker that his constitutional right to openly carry a weapon trumps a state law allowing guns in public places unless a sign is posted. Poll workers called a deputy, who made Murphy put the gun in his truck outside before voting.

    Murphy says he’s going to complain to county leaders.

  17. 17
    FlipYrWhig says:

    Non-MD/non-D.O. clinicians such as Certified Nurse Practicioners, Physician Assistants, Master and Doctorate level Physical Therapists etc. often will roll their billing up to a doctor’s Medicare billing number.

    Shouldn’t they, like, not do that? Or have the practice number be the one everyone uses, and a “primary responsibility” code for everyone who does a specific task?

  18. 18
    Calouste says:


    It always surprises me that these supposedly Christian ammosexuals (there is a pretty big overlap) think they should be allowed to carry a gun in a church. Swords to Plowshares, the Prince of Peace, Turn the other Cheek, seems like half the content has been expunged from the Bible they read.

  19. 19
    Mnemosyne says:


    G sometimes has to deal with medical billing. It’s screwed up far beyond what you would believe. How anyone gets paid, I have no idea.

  20. 20

    NONONONO the existence of any fraud, waste, or abuse immediately demands the immediate termination of the program. Because reasons.

  21. 21
    Villago Delenda Est says:

    In order to fight the fraud at low level, you need to have lots of paid inspectors whose job it is to detect the fraud and bring it to the attention of those with the legal means to deal with it.

    To do that, you need funding for the inspectors.

    To do that you need to have non shitheads in legislatures and congress who will approve the funding.

    To do that, you need to defeat the shitheads and the voters who support the shitheads in elections.

  22. 22
    Villago Delenda Est says:

    @Calouste: These people are not Christians. They are heretical worshipers of Mammon and Morloch.

  23. 23
    piratedan says:

    @Calouste: pretty sure that they stopped somewhere in the Old Testament because if they ever got around to what that Jesus guy was supposedly practicin and preachin, well it’s patently obvious that guy was a freeloading hippie.

  24. 24
    Bill Arnold says:

    (and Richard Mayhew, and askew)
    What’s the current bleeding edge in medical insurance billing fraud detection?
    Is there any machine learning involved (supervised or unsupervised or both), or are the detection methods mostly hand-crafted?

  25. 25
    KG says:

    @Richard Mayhew: ah, that’s where law and medicine are different. paralegals, clerks, and other staff are typically billed at a lower level than lawyers (who depending on their rank may also be billed differently). so, you might have 20 hours for an associate on a case, 15 for a paralegal, and 5 for a partner, but they’d all be billed separately. Still, I get where you’re coming from.

  26. 26
    Ryan G says:

    IANAD but my shifts are all coded on the date they start… if I work 12 hours on June 2nd dayshift and then 12 hours + 2 overtime on June 2nd nightshift, that’s 26 hours in a day. Nevermind that I’m not done until 9AM on the third.

    Doesn’t apply to the specific case here but I’ll bet there are thousands of ER docs – and especially residents – who run into this sort of thing.

  27. 27
    soprano2 says:

    As a person who works with HIS maps regularly I know what a PITA addresses can be. I remember how shocked I was the first time I was in a meeting where the subject of addresses came up. I thought they were simple, they’re anything but.

  28. 28
    Richard Mayhew says:

    @soprano2: Yeah, every couple of years, we get a wet behind the ears fresh from the management intern who wants to do something AWESOME and Six SIGMA-Y with address data and it takes a good three months to demonstrate that this project/idea is a great idea but it will take much more than three months to accomplish a minimal efficiency gain, so if you really want to see a three basis point increase in the claims auto-adjudication rate and can find thirty man years to build the project and 2 FTEs to maintain it, we can do it, BUT…..

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