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Computer-aided auditing of prescription drug claims

Author

Listed:
  • Vijay Iyengar
  • Keith Hermiz
  • Ramesh Natarajan

Abstract

We describe a methodology for identifying and ranking candidate audit targets from a database of prescription drug claims. The relevant audit targets may include various entities such as prescribers, patients and pharmacies, who exhibit certain statistical behavior indicative of potential fraud and abuse over the prescription claims during a specified period of interest. Our overall approach is consistent with related work in statistical methods for detection of fraud and abuse, but has a relative emphasis on three specific aspects: first, based on the assessment of domain experts, certain focus areas are selected and data elements pertinent to the audit analysis in each focus area are identified; second, specialized statistical models are developed to characterize the normalized baseline behavior in each focus area; and third, statistical hypothesis testing is used to identify entities that diverge significantly from their expected behavior according to the relevant baseline model. The application of this overall methodology to a prescription claims database from a large health plan is considered in detail. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Vijay Iyengar & Keith Hermiz & Ramesh Natarajan, 2014. "Computer-aided auditing of prescription drug claims," Health Care Management Science, Springer, vol. 17(3), pages 203-214, September.
    • Handle: RePEc:kap:hcarem:v:17:y:2014:i:3:p:203-214
    DOI: 10.1007/s10729-013-9247-x
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    References listed on IDEAS

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    1. Jing Li & Kuei-Ying Huang & Jionghua Jin & Jianjun Shi, 2008. "A survey on statistical methods for health care fraud detection," Health Care Management Science, Springer, vol. 11(3), pages 275-287, September.
    2. Hyman, David A, 2001. "Health Care Fraud and Abuse: Market Change, Social Norms, and the Trust "Reposed in the Workmen."," The Journal of Legal Studies, University of Chicago Press, vol. 30(2), pages 531-567, June.
    Full references (including those not matched with items on IDEAS)

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    Keywords

    Audit; Fraud; Abuse;
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