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Data transparency opened the door for fraud bounty hunters


The term "bounty hunter" conjures up a few distinct images. For some, maybe it's a rugged cowboy equipped with two six shooters studying a "Wanted: Dead or Alive" poster. For others, the first image is a large, leather-vested man with a distinct blond mullet that goes by the name of "Dog."

Here's an image that doesn't come to mind: A man hunched over glowing laptop. Instead of six-shooters, his weapons of choice are an ergonomically enhanced office chair and a fresh pot of coffee.

Meet the 21st century fraud bounty hunter.

If you read last week's story about John Minnino, the Medicare fraud bounty hunter, you know what I'm talking about. Amid growing concerns surrounding Medicare fraud, a new type of bounty hunter is poised to emerge.

Minnino is a bit of a pioneer in this regard. After spending 18 years as an attorney specializing in medical negligence and with a penchant for recognizing fraud, he told Wired that he saw a "massive business opportunity."

That business opportunity is whistleblowing, and he's right, sounding a whistle can be a lucrative endeavor if you blow it in the right direction. In fiscal year 2015, the federal government doled out $330 million to whistleblowers who brought forth False Claims Act (FCA) cases tied to healthcare fraud, approximately 18 percent of the $1.8 billion the government collected on those qui tam claims.

As it turns out, the government relies almost exclusively on whistleblowers to bring FCA violations forward, which explains why it's willing to pay up to 30 percent of what it collects from fraudsters. In FY 2015, 423 new healthcare FCA cases were brought by whistleblowers. Only 25 were not.

I suppose the first iteration of Medicare fraud "bounty hunters" would be whistleblower attorneys who offer up their expertise to bring cases in front of the government. But as Minnino points out, that model relies on getting whistleblowers who may or may not be aware of the pathways for reporting fraud to come forward. Plus, coaxing someone to speak up is no easy task considering the risk involved.

So Mannino flipped the script. Instead of luring whistleblowers to him, he used newly released data to target healthcare employees who could provide context to questionable billing patterns.

This is a key feature of his approach, one that wouldn't have been possible without the Centers for Medicare & Medicaid Services (CMS) finally releasing Medicare payment data in 2014. CMS pitched the move as the Obama administration's push toward transparency, conveniently ignoring the fact that it only relinquished the data after losing a lawsuit to Dow Jones, the publisher of the Wall Street Journal. Regardless, the data dump swung open the door for someone like Minnino, even amid much handwringing from the American Medical Association (AMA).

Minnino embodies what many hoped would come of the annual data release: A more detailed, targeted approach to uncovering Medicare fraud. Even better, his method should calm the folks at the AMA, whose main concern has been that the payment data offers little context, along with critics of whistleblower rewards that argue high-percentage payments bring forth frivolous claims.

By using claims data--along with other data collected by organizations through Freedom of Information Act requests--as a jumping off point, Minnino has revealed the context AMA was so concerned about. He's not just targeting a well-compensated physician or medical clinic; he's looking for specific patterns and indicators of fraud, and supplementing those with witness testimony.

Of course, it's not completely altruistic. Minnino stands to make a sizeable profit from the roughly 40 lawsuits he's filed so far. But these claims aren't wild shots in the dark. They're more refined, calculated allegations. In that sense, he's swung the door open for other entrepreneurial fraud fighters looking to strategically cash in on rewards.

It's a fitting solution when you think about it. Maybe the only way to fight the big business of Medicare fraud is by attacking it with a bigger business of fraud fighters. - Evan (@HealthPayer)