Skip to main content

Advertisement

Log in

Detecting hospital fraud and claim abuse through diabetic outpatient services

  • Published:
Health Care Management Science Aims and scope Submit manuscript

Abstract

Hospitals and health care providers tend to get involved in exaggerated and fraudulent medical claims initiated by national insurance schemes. The present study applies data mining techniques to detect fraudulent or abusive reporting by healthcare providers using their invoices for diabetic outpatient services. This research is pursued in the context of Taiwan’s National Health Insurance system. We compare the identification accuracy of three algorithms: logistic regression, neural network, and classification trees. While all three are quite accurate, the classification tree model performs the best with an overall correct identification rate of 99%. It is followed by the neural network (96%) and the logistic regression model (92%).

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  1. Lassey M, Lassey W, Jinks M (1997) Health care systems around the world: characteristics, issues, reforms. Prentice-Hall, NJ

    Google Scholar 

  2. Hong S, Weiss S (2001) Advances in predictive models for data mining. Pattern Recog Lett 22(1):55–61

    Article  Google Scholar 

  3. Bolton R, Hand D (2002) Statistical fraud detection: a review. Statist Sci 17(3):235–249

    Article  Google Scholar 

  4. Koh H, Tan G (2005) Data mining applications in healthcare. J Healthc Inf Manag 19(2):64–72

    Google Scholar 

  5. Ratner R (1998) Type 2 Diabetes Mellitus: the grand overview. Diabetic Med 15(S4):S4–S7

    Article  Google Scholar 

  6. Guisseppi F, Gangopadhyay A, Adya M (2000) Intelligent data mining system to detect healthcare fraud. In: Armoni A (ed) Healthcare information systems: challenges of the new millennium. Hershey, Idea Group Publishing, PA

    Google Scholar 

  7. National Health Insurance Bureau (2000–2004) National Health Insurance Statistics

  8. Bureau of National Health Insurance (2004) Report on quality of medicare for diabetes mellitus under National Health Insurance

  9. Sparrow M (1996) License to steal. Westview Press, Boulder, CO

    Google Scholar 

  10. Long J, Irani E, Slagle J (1991) Automating the discovery of causal relationships in a medical records database. In: Piatestsky-Shapiro G, Frawley W (eds) Knowledge discovery in database. AAAI Press, Menlo Park, CA

    Google Scholar 

  11. Milley A (2000) Healthcare and data mining. Health Manag Technol 21(8):44–47

    Google Scholar 

  12. Koh H, Gerald T (2005) Data mining applications in healthcare. J Healthc Inf Manag 19(2):54–72

    Google Scholar 

  13. Lim T, Loh W, Shih Y (2000) A comparison of prediction accuracy, complexity, and training time of thirty-three old and new classification algorithms. Mach Learn 40(3):203–229

    Article  Google Scholar 

  14. Chae Y, Seung H, Kyoung W, Dong H (2001) Data mining approach to policy analysis in a health insurance domain. Med Inf 62(2):103–111

    Article  Google Scholar 

  15. Quinlan J (1993) C4.5: programs for machine learning. Morgan Kaufmann, San Mateo, CA

    Google Scholar 

  16. Kincade K (1998) Data mining: digging for healthcare gold. Ins Technol 23:IM2–IM7

    Google Scholar 

  17. Yang W, Hwang S (2006) A process- mining framework for the detection of healthcare fraud and abuse. Expert Syst Appl 31(1):56–68

    Article  Google Scholar 

  18. Chan C, Lan C (2001) A data mining technique combining fuzzy sets theory and bayesian classifier-an application of auditing the health insurance fee. Proceedings of the International Conference on Artificial Intelligence, IC-AI’2001, Las Vegas, USA: 402–408

  19. Bloomgarden Z (2002) The epidemiology of complications. Diabetes Care 25(5):924–932

    Article  Google Scholar 

  20. American Diabetes Association (2003) Report of the expert committee on the diagnosis and classification of diabetes mellitus. Diabetes Care 26(Suppl 1):S5–S20

    Google Scholar 

  21. American Diabetes Association (2004) Standards of medical care in diabetes. Diabetes Care 27(1):S15–S35

    Article  Google Scholar 

  22. Health Insurance Association of America (1993) Update Source Book of Health Insurance Data

  23. Nisbet R (2006) Data mining tools: which one is best for CRM? Part 3, BI Report, March (2006), available at http://www.dmreview.com/editorial/dmreview/print_action.cfm?articleId=1049954. Accessed on March 9, 2007

  24. Young M, Seung H, Dyoung W, Dong H, Sun H (2001) Data mining approach to policy analysis in a health insurance domain. Int J Med Inf 62:103–111

    Article  Google Scholar 

  25. Dasgupta C, Despensa G, Ghose S (1994) Comparing the predictive performance of a neural network model with some traditional market response models. Int J Forecast 10(2):235–244

    Article  Google Scholar 

  26. Fish K, Barnes J, Aiken M (1995) Artificial neural networks: a new methodology for industrial market segmentation. Industrial Market Manag 24(5):431–438

    Article  Google Scholar 

  27. Hruschka H (1993) Determining market response functions by neural network modeling: a comparison to econometric techniques. Eur J Oper Res 66(1):27–35

    Article  Google Scholar 

  28. Cabena P, Hadjinian P, Stadler J, Zanasi A (1998) Discovering data mining from concept to implementation. Prentice Hall PTR, Upper Saddle River, NJ

    Google Scholar 

  29. McKee T, Lensberg T (2002) Genetic programming and rough sets: a hybrid approach to bankruptcy classification. Eur J Oper Res 138:436–451

    Article  Google Scholar 

  30. Widrow B, Rumelhart D, Lehr M (1994) Neural networks: applications in industry, business and science. Commun ACM 37(3):93–105

    Article  Google Scholar 

  31. Wilson R, Sharda R (1994) Bankruptcy prediction using neural networks. Decis Support Syst 11(5):545–557

    Article  Google Scholar 

  32. Wu J (1994) Neural networks and simulation methods. Marcel Dekker Inc., NY

    Google Scholar 

  33. Haykin S (1994) Neural network: a comprehensive foundation. Prentice Hall PTR, Upper Saddle River, NJ

    Google Scholar 

Download references

Acknowledgements

The authors thank the National Science Council of the Republic of China for financially supporting this research (NSC 95–2416-H-264 -010).

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Fen-May Liou.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Liou, FM., Tang, YC. & Chen, JY. Detecting hospital fraud and claim abuse through diabetic outpatient services. Health Care Manage Sci 11, 353–358 (2008). https://doi.org/10.1007/s10729-008-9054-y

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10729-008-9054-y

Keywords

Navigation