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SSA turning to predictive analytics to fight disability fraud

Earlier this year, people across the nation were stunned to learn about a massive disability fraud scheme in New York City involving retired police officers and firefighters. To date, over 100 arrests have been made, while the Social Security Administration's Office of the Inspector General estimates that the amount of fraudulent benefits taken in the scheme now exceeds $30 million.

In light of this incident and another major fraud incident involving 70 people in Puerto Rico, the SSA is now taking further steps to boost its fraud prevention and detection efforts.

Specifically, Acting SSA Commissioner Carolyn Colvin announced a few weeks back that the agency is currently in the process of forming a special fraud prevention unit that will rely on the use of predictive analytics to help combat fraud and ensure that disability benefits go to those who truly need them.

For those unfamiliar with the idea of predictive analytics, it is essentially the gathering, organizing and analyzing of data sets in order to uncover patterns and make educated predications.

“SSA will apply analytics tools that can determine common characteristics and meaningful patterns of fraud based on data from past allegations and known cases of fraud,” said. “We will apply these tools when reviewing business applications or existing data on beneficiaries for potential fraud or other suspicious behavior.”

In addition, SSA officials announced that the new fraud prevention unit would be assisted by other specialized fraud units within the agency that are designed to actively investigate otherwise suspect cases.

The use of predictive analytics in fraud detection/prevention efforts is far from unprecedented. For example, the Massachusetts Medicaid Fraud Unit currently utilizes predictive modeling to identify and fight fraudulent schemes. To date, these efforts have helped the unit recover $2 million worth of improper payments.

It is worth noting that the SSA's efforts to combat fraud have heretofore enjoyed considerable success, as evidence shows that the actual level of disability fraud actually sits below one percent.

It will be interesting to see if the SSA's experiment with predictive analytics can help improve upon this already impressive number.

Stay tuned for updates ...

Source: GCN, "Social Security to step up fraud detection with predictive analytics," Stephanie Kanowitz, April 22, 2014

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