Sequence Mining and Prediction-Based Healthcare Fraud Detection Methodology

This article presents a novel methodology to detect insurance claim related frauds in the healthcare system using concepts of sequence mining and sequence prediction. Fraud detection in healthcare is a non-trivial task due to the heterogeneous nature of healthcare records. Fraudsters behave as normal patients and with the passage of time keep on changing their way of planting frauds; hence, there is a need to develop fraud detection models. The sequence generation is not the part of previous researches which mostly focus on amount based analysis or medication versus diseases sequential analysis. The proposed methodology is able to generate sequences of services availed or prescribed by each specialty and analyse via two cascaded checks for the detection of insurance claim related frauds. The methodology addresses these challenges and self learns from historical medical records. It is based on two modules namely “Sequence rule engine and Prediction based engine”. The sequence rule engine generates frequent sequences and probabilities of rare sequences for each specialty of the hospital. The comparison of such sequences with the actual patient sequences leads to the identification of anomalies as both sequences are not compliant to the sequences of the rule engine. The system performs further in detail analysis on all non-compliant sequences in the prediction based engine. The proposed methodology is validated by generating patient sequences from last five years transactional data of a local hospital and identifies patterns of service procedures administered to patients using Prefixspan algorithm and Compact prediction tree. Various experiments have been performed to validate the applicability of the developed methodology and the results demonstrate that the methodology is pertinent to detect healthcare frauds and provides on average 85% of accuracy. Thus can help in preventing fraudulent claims and provides better insight into how to improve patient management and treatment procedures.