1

Data Mining SolutionUsing Data Mining Analytics

to Support Fraud Detection in CalWORKs Stage 1 Child Care

2

Data mining is a reiterative process of selecting, exploring and modeling large amounts of data to identify meaningful, logical patterns and relationships among key variables.

Source: Data Mining 101: How to Reveal New Insights in Existing Data to Improve PerformanceInsights from a webinar in the SAS Applying Business Analytics SeriesOriginally broadcast in June 2010

Data Mining Technology

3

DPSS’ Data Mining Solution (DMS) is a computer application that employs pattern detection and predictive analytics to detect and prevent fraud in public assistance programs, such as our CalWORKs Stage 1 Child Care Program.

A Board Motion introduced by Supervisor Antonovich on May 29, 2007, provided the Department of Public Social Services (DPSS) the vision to utilize cutting edge technology, such as data mining and predictive analytics, to ensure and maintain the integrity of the County's public assistance programs.

A successful pilot was completed in 2008 which evaluated the effectiveness of using data mining technology to detect potential fraud in the CalWORKs Stage 1 Child Care Program.

The DMS Agreement was approved by the Board on December 22, 2009, for SAS Institute Inc. (SAS) to design, develop and implement the data mining technology for Los Angeles County to target fraud in the CalWORKs Stage 1 Child Care Program.

The DMS Application was implemented on May 2011 by DPSS to target fraud in the CalWORKs Stage 1 Child Care Program.

The Board Approved an Amendment to the DMS Agreement on May 15, 2012 to extend the data mining technology to In-Home Supportive Services (IHSS) Program.

Project Background

4

DMS Application is hosted in Cary, North Carolina by SAS OnDemand

The SAS Fraud Framework tracks:• CalWORKs Stage I Child Care Participants with children requesting

assistance from the County;• Providers that care for children while the parent or guardian go to work or

school; and • Employers on record providing employment for the participants who attempt to

defraud the County of Los Angeles by obtaining payment for falsified services.

Using state of the art data mining techniques the DMS application:• Prioritizes referrals from Alternate Payment Program agencies (APPs)• Consolidates data for investigations• Shows networks among providers and participants• Streamlines / optimizes searching of County data sources• Capable of integrating with existing workflow and case management systems

Displays results using the advanced visualization application

Uses statistically designed risk measures to predict collusion activities

Project Objectives and Key Milestones

5

Data Preparation EffortsHistorical data from 2001 to PresentData was (cleaned/matched/consolidated/geocoded) monthly from DPSS and external data sources to generate dozens of variables for data mining models including:Data Focus: Participant and Provider CalWORKs Stage 1 Child Care

– Child care utilization, request and provider files– Welfare-to-Work activity tables from the GEARS system– Child care licensing files– LEADER Case and Individual tables for participant records

Data includes known cases of fraud and alleged fraud– LEADER Fraud cluster tables to identify participants referred/prosecuted for Child Care and other fraud types

External Data Sources– State employment, employer and Income& Eligibility Verification System (IEVS) &

New Hire (NHR) files– Dun and Bradstreet employment file– In-Home Supportive Services (IHSS) participant and provider files

Project Data Sources

6

Risk Assessment Rules/Pattern Recognition Anomaly Detection Predictive Model Hot List - (e.g., Providers & Employers with known fraudulent activity) Social Network Linkages

Operational Outcome Prioritized by Alert score Monthly High Risk Report Drill-down into case detail Further drill-down into Alert detail Launch into other ad-hoc analyses

Alert Score Base score Plus or minus depending on value of components

Anomaly Detection

7

Triage View High risk Alerts are generated based on the comparisons between

CalWORKs Stage 1 Child Care cases and the typical profile of fraudulent CalWORKs cases

Designated Triage Workers (DTWs) are assigned to conduct comprehensive case reviews based on these Alerts

Referrals are initiated to Welfare Fraud Prevention & Investigations (WFP&I) Section

Case action reviews result in one or more of the following outcomes: termination of benefits, overpayments, reduction in benefits, share of cost and/or fraud referral

Investigator View DMS provides tools and the capability to the DPSS WFP&I team to assist

in their detection, prevention, and investigation of fraud in the CalWORKs Stage 1 Child Care Program

The Social Network Analysis allows WFP&I to identify suspicious cases for preliminary earlier investigation

Provide access to participant’s 10-year historical data across Programs

Utilization Process

8

LA County Fraud Framework – DMS

Log On Page

CASE VIEW SELECTION

Case View Select

Triage View

Triage View

Investigator View

Investigator View

12

User Interface Participant DetailsThe Participant Detail pane provides a quick view at the participant case record information related to residential address, family members, providers, employment, source income and benefits and prior welfare fraud historical records.

Participant Detail Page

Timeline Graph

Timeline Tab

The Timeline tab is a graphic representation of the data from the Provider, Address, Employment, Component, Income and Benefits, and DPSS Actions tabs This graph provides a brief, color-coded view of each data source, as well as a quick method for seeing when each event occurred.

14

Street Map View

Social Network Map View

Relationship Tree

Relationship Tree

The Relationship Tree tab shows a participant’s family, household members, and other relatives. Users can adjust the time slider to view the tree over time.

Risk Assessment

Risk Assessment

Risk Assessment tab contains a list of key fraud indicators for a participant. The tab contains two parts: the Predictive Model section and the Triggers section.

17

Social Network AnalysisThe Social Network Analysis provides a graphical view of the Participant case record centered on the graph with all the connections within the database of other Participants, Providers, Employment activities and Phone Number connections to the CalWORKs Stage 1 Child Care Participant.

Social Network Example

Legend

18

Participant Detail Summary Report in PDF Format

PDF Summary Report 18

19

Holistic Approach to Program Integrity

From May 2011 through July 2013, the following actions were initiated:

• * 28 Cases have been referred to the District Attorney for felony prosecution

• * 405 DMS fraud referrals initiated for investigation• Triage-Initiated: 311• WFP&I-Initiated: 94

• * 753 Referrals to DPSS case workers for follow up action resulting in:

• Fraud referrals for reasons other than child care fraud• Denial/Termination/Reduction of various public assistance benefits• Overpayments