Blog

COPS: A Data-driven Solution for Pharmacy Fraud Detection

Isaiah Goodall

November 3, 2017

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Prescription drug fraud is a costly problem for health insurance providers, but identifying perpetrators can be extremely difficult. Staying ahead of ever-evolving fraud risks and proactively identifying and investigating active threats can be a challenge for insurance providers, Pharmacy Benefit Managers, Managed Care Organizations, and regional pharmacies. The many different actors and schemes involved, varying state regulations and oversight, and compliance with privacy laws all contribute to the challenge of detecting and preventing prescription drug fraud.

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The Challenge

According to the Pharmaceutical Care Management Association approximately 1% of prescription drug costs result from fraud, waste, and abuse. This amounts to hundreds of millions of dollars in costs unnecessary costs for health care payors such as Medicare Part D.

Doctor.jpgPharmacy fraud can be committed by many different actors including physicians, pharmacists, pharmacy owners, drug companies, and Pharmacy Benefit Managers (PBM) to name a few and there are many schemes used to commit pharmacy fraud. Some common examples include: 
 
  • Prescription Drug Switching - Substituting a more expensive drug for a cheaper one or billing for brand name drugs when generic drugs are dispensed. 
  • Phantom Prescriptions - Billing for a forged or nonexistent prescription.
  • Duplicate Billing - Billing multiple payors for the same prescription.
  • Prescription Shorting - Filling less than the prescribed quantity of a drug.
  • Drug Diversion - Diverting a prescription drug for sale or use in some illegal activity. Often the patient is paid for the prescription and the drugs are recycled by the pharmacy or sold on the black market.
  • Auto-refilling - Automatically refilling a prescription when a patient did not request a refill. Without the patient's knowledge, the pharmacy will then bill Medicare for prescriptions that patients never picked up.
  • Pricing Fraud - Charging patients full cost rather than the lower negotiated price or retaining manufacturer rebates rather than passing them on to the patient. Another example is drug companies inflating the Average Wholesale Price which is used by Medicare to determine the reimbursement for each drug.
  • Kickbacks and Bribes - Drug manufacturers paying health care professionals to prescribe or purchase profitable drugs manufactured by that company.

The COPS Solution

Elder Research partnered with Pharmacy Investigators and Consultants to develop COPS, a comprehensive pharmacy fraud solution focused on prevention, detection, and restitution.

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COPS uses scientific methods to uncover fraud or assess security vulnerabilities in health care settings. COPS proprietary methodology involves proven criminological theory and machine learning to detect fraudulent behavior more accurately and effectively. By combining multiple data sources, predictive analytics, and intuitive visualization, the COPS solution enables health plans to quickly analyze high volumes of claims data to uncover patients,  prescribers, and pharmacists working together to commit fraud.

The COPS graphical user interface integrates claims data with external sources such as CMS and maps data and provides investigators with detailed information on:

  • Prescribers
  • Pharmacies
  • National Drug Codes
  • Transactions
  • Costs

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Request a COPS Demo


Related

Download the COPS Brochure

Learn More About Pharmacy Fraud Detection

Visit Elder Research at the NHCAA Health Care Anti-Fraud Expo Booth #102 


About the Author

Isaiah Goodall Director of Business Development Isaiah Goodall leads business development for the commercial division at Elder Research focusing on the insurance, financial services, healthcare, and software industries. Isaiah enjoys helping clients understand how they can improve their analytics to solve real business challenges and deliver return on investment. Isaiah is returning to Elder Research after working two years with an international economic development non-profit. In his previous role at ERI, he led business development for five years in the Arlington, Virginia office and helped secure new advanced analytics projects at several government agencies and Fortune 500 corporations. In 2011, he was the founding program chair of Predictive Analytics World for Government, a leading, vendor-neutral predictive analytics conference in Washington, DC.