Medicaid Program Integrity: Best Practices for Using Predictive Analytics to Reduce Fraud, Waste and Abuse

In fiscal year 2014, Medicaid distributed $508 billion, of which state governments shouldered $204 billion. With an overall improper payment rate of 6.7 percent, Medicaid lost more than $34 billion — and states bore the burden for about half that amount. Since states are responsible for most of the fiscal oversight with the Medicaid program, many are looking to take their program integrity (PI) game to the next level by integrating cost avoidance activities — based on predictive analytics — into their fraud, waste and abuse strategies. This handbook recommends a more integrated and comprehensive approach to tackling fraud, waste and abuse, and offers best practices for states seeking to re-invent and re-invigorate their Medicaid PI initiatives and processes with predictive analytics approaches and tools.