Texas spots suspected fraud using detection service

The state of Texas has identified nearly $30 million in suspected fraud, abuse and waste in the Texas Medicaid program since implementing a Medicaid Fraud and Abuse Detection System five years ago, Electronic Data Systems Corp. announced July 8.


EDS of Plano, Texas, designed the MFADS suite of tools, which helped the Texas Health and Human Services Commission exceed its mandated target for identifying misused funds by 217 percent, according to figures through fiscal 2001. The system has been used in Texas since 1997.

EDS recently won a new contract to continue providing fraud detection services to the Texas Medicaid program through August 2005.


"The MFADS is a proven tool in effectively detecting fraud, abuse or waste not identified by other systems or processes," said Aurora LeBrun, associate commissioner in the Office of Investigations and Enforcement of the Texas Health and Human Services Commission.


The fraud detection software is deployed at the desktops in commission offices. It uses mathematical algorithms and broad-based neural network models to identify suspicious activities.

Data is made available to state officials in formats such as graphs and charts that condense a health care provider's history and compare patterns and performance with his or her true peers. A critical component of the system is fraud and abuse detection and software services provided by HNC Software Inc. of San Diego.



As part of its new contract with the state, EDS will design and deploy a laptop application to perform hospital and nursing facility medical necessity reviews, along with ongoing database support for this program.