Journal of Health & Medical Economics

The Potential Savings of using Predictive Analytics to Staunch Medicaid Fraud

Health care fraud is a major policy concern. In this paper, we report the results of applying fraud and abuse analytical detection technology with a predictive algorithm to identify and extrapolate the extent of Medicaid fraud and abuse in terms of prevalence and expenditures from 2008 to 2012. Using Medicaid claims
from the State of Louisiana, we estimate approximately $61 million per year in potential savings from the initial entry of the program. Long-term savings are estimated to be $97 million per year by 2019.  Implementation of this technology, and the associated technology, can begin immediately in order to start realizing these savings.

Author(s):

Parente ST, Oberlin S, Tomai L and Randall DO

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