Stop that fraud: Fingerprints will secure Texan systems

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A pilot system to beat Medicaid fraud is showing good results in the state of Texas.

To battle Medicaid fraud, the state of Texas is in the middle of a biometric authentication pilot that is said to be the first of its kind in the U.S.

More than 180,000 Medicaid recipients in six Texas counties are taking part in the pilot, which calls for them to have a mathematical representation of a finger image stored on a smartcard along with their demographical details.

Texas has already implemented a system of finger-imaging for welfare recipients, but says it is the first to use the technology in the Medicaid arena.

When recipients come into the office of a healthcare provider, they put their card in the reader and then on the device, which captures the finger image and compares it to the one on the card.

Well aware of privacy issues, the state has implemented safeguards. First, that representation of the finger image cannot be reproduced or re-engineered to become the actual image of the print.

Second, the image only goes on each individual's card and is not stored on a central database. "This gets us away from a lot of the privacy issues," says William Riippi, who is heading the project management function, provided by MTG Management Consultants.

While Medicaid coverage varies from state to state, in Texas it serves mostly low-income families, non-disabled children, related caretakers of dependent children, pregnant women, elderly and people with disabilities.

Currently, there are 2.5 million Medicaid clients in Texas and the budget for their care is $15. 5 billion, or 26.1 percent of the state's entire budget – up from 20.8 percent as recently as 1998.

Texas estimates that fraud is around ten percent of the total, and more common among providers than recipients. The legislature has passed aggressive laws to track down all perpetrators.

To combat over-billing by providers, Texas increased its number of Medicaid investigators from 36 to 110, and plans to hire another 30.

On the recipient side, the Texas Health and Human Services Commission (HHSC) has launched a $10.1m "Front End Authentication and Fraud Prevention System" pilot with a mission statement that includes maximizing efficiencies and cutting costs in the Medicaid program, cutting the number of fraud cases arising from authentication fraud, abuse, and waste, and facilitating the transition to new technology initiatives that would prevent those abuses without affecting the quality of service for Medicaid recipients.

Four vendors – Atos Origin, EDS, eMedical Files, and Maximus – were chosen to be part of the pilot. They installed their biometric solutions in the offices of 150 providers around Texas and then each recruited around 30,000 recipients to take part. The pilot is running from July to December.

"Basically, we are looking at what the potential is for reducing fraud and how applicable the technology is to the different applications from both the client and provider standpoint," said Riippi.

The questions being asked are: "Will the client accept the system and the technology?" "How do clients feel about the privacy issue of finger imaging?" and "How do the providers feel about actually using this technology?"

So far, he says, the results are positive. "The clients are mostly favorable to the technology. The providers also see this as the way of the future."

During the pilot, however, the providers do not have to confront recipients if the smartcards come up with "no match." They just report it to the HHSC.

An independent evaluation of the pilot is being carried out by the International Biometric Group, which is a vendor-independent and technology-neutral, consulting company.

A final report is due this month and one or more of the vendors will get to implement a solution state-wide. This will also probably include an online Medicaid eligibility function to check whether clients are eligible for services. Nowadays that is a time-consuming, often telephone-based operation.

As for the pilot, the vendors are doing well. "From a project management point of view, all the vendors have concepts that are favorable to the whole process," says Riippi. "We're looking at best practices and we will put together the best of the best. Whether that ends up with a winner-takes-all is not determined at this point in time."

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