For eight years, I served as chief of the Antitrust and Government Program Fraud Department in the Connecticut Attorney General’s Office. During that time, my attorneys and investigators spent a great deal of time identifying potential fraud in the Connecticut Medicaid program, otherwise known as HUSKY Health.
In order to vet Department of Social Services referrals for further investigation, we reviewed audit findings, claims data, and obvious billing anomalies. Things like a mental health provider billing for 36 hours of psychotherapy in a single day, or a primary care physician billing office visits for the same patient three or four times a week for weeks on end. Yes, both of those examples really happened, and they were relatively easy cases to spot — and prove.
But advanced data mining is often blind to a clever cheat. A provider who knows how to game the system can easily fly under the radar by billing the state for a standard, unremarkable 20-minute office visit. On paper, it looks flawless. It does not trigger a single red flag. But in reality, that visit never happened.
In the healthcare enforcement world, we call these “ghost claims.” And right now, Connecticut’s HUSKY Health program is missing one of its best defenses against them because the one person who can verify the truth — the patient — is largely left out of the process.
Think about how commercial health insurance or Medicare works. After a doctor’s visit, you receive an Explanation of Benefits, or EOB. It is not a bill. It is simply a receipt showing what treatment or service was charged in your name. If you see a charge for an office visit or procedure you never received, you are encouraged to call the insurer’s fraud hotline. Patients themselves become part of the fraud detection system.
Traditionally, Medicaid programs have not relied on beneficiary EOBs the way Medicare and commercial insurers do.
Many Medicaid programs moved away from routine beneficiary EOBs because of administrative cost concerns and skepticism that patients with little or no financial stake in the claims process would actively review them.
But those savings came at a hidden enforcement cost. When a fraudster knows a patient will never see the receipt, fabricating an appointment becomes a far less risky proposition. They are unlikely to be caught.
To be sure, state agencies face legitimate logistical concerns. Medicaid populations are often highly mobile, meaning sensitive paper documents can end up returned to sender or delivered to outdated addresses. Dense insurance forms can also confuse or alarm patients who may mistake them for actual medical bills.
But we are no longer living in the paper era. Most low-income adults now use smartphones. The solution is not more paper mail. It is smarter digital verification.
Imagine a system where a HUSKY Health claim automatically triggers a secure text message to the patient’s phone: “Did you visit Dr. Smith’s clinic in Hartford on Tuesday? Reply YES or NO.” The message would not need to contain sensitive medical information — only a basic confirmation that a visit occurred.
From the perspective of a fraud investigator or prosecutor, a tool like this would materially change the game.
First, it creates a powerful psychological deterrent. Fraudsters are opportunistic. They are far less likely to bill for services never rendered if they know patients are receiving immediate verification requests on their phones.
Second, it addresses the timeline problem. Healthcare fraud investigations are still often triggered by retroactive post-payment audits. By the time investigators identify suspicious claims and interview patients, months or even years may have passed. Memories fade. More importantly, the money paid to the fraudster is often gone.
In enforcement circles, there is a phrase for this approach: “pay and chase.” It is a reactive enforcement model.
I cannot tell you how many times my department successfully built a fraud case, prosecuted the defendant, and still recovered little or nothing for Connecticut taxpayers because the assets had already disappeared. A system generating immediate automated “NO” responses from patients would provide investigators with a real-time early warning system, allowing the state to suspend questionable payments and stop losses before millions of dollars walk out the door.
Connecticut is under growing pressure to reduce healthcare waste without cutting benefits or placing additional burdens on legitimate providers. As states look for ways to strengthen Medicaid integrity, modernizing fraud detection tools should be part of the solution. Fortunately, federal policy has evolved to give Medicaid programs greater flexibility to communicate with beneficiaries through secure digital tools, including text messaging.
The technology already exists. A digital verification system would not be free to implement. But in a program measured in billions of dollars, preventing even a fraction of fraudulent claims before the money disappears could easily justify the investment.
A digital verification pilot program for HUSKY Health could better protect patients from identity theft, provide investigators with real-time fraud intelligence, and potentially save taxpayers millions of dollars.
It is time to bring Connecticut’s healthcare fraud enforcement tools into the 21st century.
Michael Cole served as the chief of the Antitrust and Government Program Fraud Department for the Connecticut Attorney General’s Office for eight years. He currently lives in Canton.