Final Rule on Data Mining in Medicaid

The U.S. Department of Health and Human Services, Office of Inspector General today issued a final rule relating to the use of data mining by Medicaid Fraud Control Units (MFCUs).

The rule amends a provision in HHS regulations (42 CFR ยง1007.19) prohibiting State Medicaid Fraud Control Units (MFCU) from using Federal matching funds to identify fraud through screening and analyzing Medicaid data, or "data mining." In order to "support and modernize MFCU efforts to effectively pursue Medicaid provider fraud" this rule permits Federal financial participation (FFP) in costs of data mining activities, as defined. The rule also includes a requirement that MFCUs annually report costs and results of approved data mining activities to OIG. The rule becomes effective June 17, 2013.

Here is how data mining is defined in the rule: "Data mining is defined as the practice of electronically sorting Medicaid or other relevant data, including but not limited to the use of statistical models and intelligent technologies, to uncover patterns and relationships within that data to identify aberrant utilization, billing, or other practices that are potentially fraudulent."

To read the seven-page rule, click here.