Mathematics of Outlier Detection and Pattern Recognition: Pharmacy Fraud

•Product: MED-DETECTION•Pharmaceutical drug non-adherence causes $290 Billion

additional cost of care in USA. •Pharmaceutical drug reimbursements drive genomics innovation, care for chronic diseases and car accident

patients, Central to mHealth and Tele-health initiatives. •Pharmaceutical drug fraud by patients, pharmacists and

providers create 360 degree Economic Hurt that also includes $60 Billion Medicare Pharmacy Fraud and Money Laundry.

•Complex Behavior: Mathematics Needed!

Sample 1: CMS Data Released in 2013: waves on right side (2010)

Sample 2: Mathematics extracted only 6% data as outlier: Pattern Continues…

Sample 3: 8 random samples were found from 450k data. All samples different in 2010.

Sample 4: Quantity dispensed to 360 units, Days supply to 180 days and Patient Payment to $570 in 450K data: note the right

side in 2010, likely due lower DAYS_SUPLY_NUM.

Sample 5: Mathematical Equations were used for segmentation; note left (2008-2009) VS right (2010) data.

Sample 6: Patient paid_$ also decreased in right side of pane (2010) in all samples; plan looses $.

Sample 7: same pattern all over here; more intense in 2010.

Sample 8: 2008-2009 Learning the fraud and, 2010 Execution of fraud.

2010 data separated from 2008-09 data and analyzed: Prescription drug fraud!

The circle on right is very high quantity dispensed at low price… Why?

Look at the hole in middle-why? Zero supply days for some money, nice!

CONCLUSIONS: REAL TIME ANALYTICS: STORE AND ANALYZE ONLY WHAT IS NEEDED. SHAVE COSTS OFF!

• High- Low Fraud Condition: Low drug quantity sold for high price and high drug quantity sold at low price in order to stay below the radar. •It all adds up- 1000 times $10 per capsule is > than 50 times $100/ tablet. You make money from Fraud! •Similar pattern for Days_supply:- 30 days is more frequent than 90 days for the same price. Helps to make money more frequently from fraud. •Very few patients showed up for 60 Days_supply! Many of the same patients from 30 days showed up in 90 days supply to raise no suspicion….

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