Medicaid 360: Enhancing the integrated care approach with enterprise analytics

Learn more from a new paper, “Manage your Medicaid program and population for the best financial and health outcomes.""

Click on the image to check out a new paper, “Manage your Medicaid program and population for the best financial and health outcomes."

Today’s Medicaid environment is drastically different from that 5, 10 or 20 years ago. Medicaid enrollment has grown to monumental heights with recent CMS numbers (April 2015) at over 70 million. As enrollment rises, concerns about efficient management of care access, cost, quality, and effectiveness have become even more prominent.

The rise in enrollment brings with it a mountain of data, not just from Medicaid systems but other areas such as social services. With over 70% of Medicaid members participating in some type of managed care plan, many States are relying on their Managed Care Organizations (MCO’s) for the bulk of their encounter data, MMIS vendors for Fee for Service data (and some encounter data) and other government agencies for social service data. This data could include education, child and family services, housing and other forms of public assistance.

This creates serious data management/analytic challenges. As states look to support a healthier Medicaid population, enterprise analytics will play a key role in holistically analyzing data from all sources. Near real-time predictive and data visualization can deliver the right insight at the right time to support a truly integrated, team-based approach to service delivery.

I’ll address this topic Wednesday, Aug. 19 at the Medicaid Enterprise Systems Conference, on a panel titled “Enhancing the Integrated Care Paradigm Through Applied Data Visualization and Analytics.”

Data and analytic challenges are nothing new to Medicaid organizations, and the benefit of time has led to advancements which significantly enhance Medicaid management capabilities across the Medicaid/Social service eco-system, and support integrated care efforts. CMS, for example, continues to push more integrated approaches to the delivery of behavioral, physical and social services through the MITA framework, Innovation lab, State Innovation Models and other mechanisms.

In addition, CMS recently released proposed rules for states to take an enhanced oversight role with managed care, including: analyzing/optimizing MCO effectiveness, strategies for quality improvement, program integrity efforts and participation in multi-payer/provider arrangements.

Further, many states have also made strides with their own Medicaid management program initiatives. There now exists an essential need to integrate the delivery of behavioral, physical and social services and associated data. Enterprise analytics and data visualization will be key to better understanding this data and the complex inter-dependencies of behavioral and physical health and social services.

Potential areas of benefit include:

  • Providing a longitudinal view of data across behavioral/physical/social services at population/member levels
  • Analyzing and projecting cost and quality of care to better understand the impactful relationship between healthcare and social service data. E.g. how can total cost of healthcare be mitigated in near and long term by making program changes to other social services a member may be receiving?
  • Strengthening reimbursement models, with a focus on paying for outcomes, and incorporating non-healthcare services in the models
  • Implementing integrated care models across all physical, behavioral and social service points
  • Adding analytics into reporting environment to streamline analytic initiatives
  • Providing real-time visual analysis of financial/medical/social outcomes on massive data sets
  • Providing a common analytic platform for a variety of users that has the flexibility to be used in Medicaid, social services and more

Many traditional Medicaid systems are severely challenged to provide the capabilities described above, in an expeditious (near real-time) manner. They are often stuck in a reactive analytics state, focused on what has happened instead of moving towards a more prescriptive view. As states are required to meet the complex demands of their Medicaid members, it is vital they continue to innovate and modernize across the Medicaid eco-system and continue to work towards a prescriptive environment.

The majority of modernization initiatives supported by CMS and states themselves must have the ability to analyze data across not just Medicaid but the convergence of Medicaid, social services and more. An enterprise analytic environment that provides a 360 degree view of a member, and uses predictive analytics is essential to this ability. The results are enhanced quality of care, reduced costs, better access and effectiveness and a more collaborative approach for delivery of Medicaid and non-Medicaid services.


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The man behind VAM: Bill Sanders honored for a lifetime of education service

Bill_Sanders_croppedLove them or hate them, value-added models (VAMs) have changed the way we look at education today. VAMs have reshaped our thinking about the effectiveness of programs, schools, educators and colleges that prepare them. While VAMs have been used in the social sciences for decades, we can credit a few influential statisticians for refining them for education; one being Dr. William “Bill” Sanders.

His body of work emerged out of the University of Tennessee Knoxville in the early 1980s before bringing his team to SAS in 2000. On June 30, Dr. Sanders will be awarded the prestigious James Bryant Conant Award by the Education Commission of the States. I’d like to further honor Bill’s work with commentary from old friends, education researchers, and practitioners who appreciate the trail he blazed.

Kati Haycock, President, Education Trust; 2009 recipient of the James Bryant Conant Award

“I learned an awful lot from Bill Sanders. He and I often presented at the same meetings. I sat through his presentations; he sat through mine. And over time, mine began incorporating more and more of his findings. His research was a chance to demonstrate how big a difference teachers make in the lives of children. But his data also allowed us to show that low-income children and children of color not only got more inexperienced and out-of-field teachers, but also more of the least effective teachers. In those years, before value-added approaches were used in teacher evaluation, I found both principals and teachers deeply interested in what his research taught us.

One, that there were big differences among teachers in the learning growth produced during an academic year. And two, that those differences were not fully explained by the characteristics of the students.

Many teachers saw that as evidence that what they did mattered, and that there were important differences in their patterns, with some teachers much more effective with high achieving students, and others more effective with low achieving students. That made sense to teachers, as well as to principals. It feels like a real loss that these insights get less attention these days. Hopefully, that won’t be a permanent loss.”

Kristen Lewald, Ed.D., PVAAS Statewide Director for Pennsylvania Department of Education, Lancaster-Lebanon Intermediate Unit 13

“Back in the early 2000’s, I was talking with Dr. Bill Sanders and his wife, Dr. June Rivers, about challenges from those who are ‘less than positive’ about VAMs. Dr. Sanders made this powerful statement to me, ‘It is easy to be the movie critic; it is hard to be the movie maker.’ He was so spot on with this statement! People can always criticize something, but it takes a whole other level to be the person who is creating and developing something meaningful and powerful. That statement gets at the essence of Dr. Bill Sanders – he has been the movie maker of value-added! He built the foundation for looking at the effectiveness of districts, school and teachers.”

Terry B. Grier, Ed.D., Superintendent of Schools, Houston Independent School District

“Dr. Bill Sanders’ work has been instrumental in allowing states, districts, and campuses to determine the growth that their students are making annually. The instructional practices and work being done every day in the schools and districts using EVAAS where I have worked have changed from focusing on just getting the ‘bubble kids’ to pass, to focusing on the academic growth of every child every day. While Bill clearly deserves the James Bryant Conant Award, he would have also received the Nobel Prize had he not spent so much time mistreating me and others on the golf course!”

Robert Greene, Current Director of Schools, Athens City Schools; Former Assistant and Deputy Commissioner, Tennessee Department of Education

Tennessee has the best student growth model and the most historical student data in the country thanks to Bill Sanders. [TVAAS] has lead Tennessee educators to become leaders in the use of student performance data. Additionally, as educators have developed an understanding of this growth model, they have been able to drill into the data to see how to improve achievement for each individual student.”

Jim Mahoney, Executive Director, Battelle for Kids

“Bill Sanders remains one of the most influential people ever in education. His work changed the conversation. Without him, student growth would not have been discussed in formative ways. For me, he leveled the playing field by showing student academic growth mattered and that it can be measured fairly, not perfectly. He brought hope to countless teachers who took kids from where they found them to higher ground regardless of their starting point. He brought evidence that teachers, principals, and schools mattered for kids. Battelle for Kids began with the philosophy espoused by Bill Sanders. While Bill is a world class statistician, what is sometimes forgotten is that he was also a world class teacher. To take complex ideas and explain them in ways that can be simply understood is real brilliance. I sat through countless presentations as he explained, clarified, demonstrated and patiently made numbers relevant to school improvement. He is most deserving of this recognition.”

Dan Goldhaber, Director of the Center for Education Data & Research and Professor at the University of Washington Bothell; Director of the National Center for Analysis of Longitudinal Data in Education Research (CALDER); Vice-President at American Institutes of Research (AIR)

“On a number of occasions I have had the pleasure of hearing Bill describe value added. His ability to explain complex ideas in readily graspable ways to diverse audiences was simply amazing. Bill played a significant role in helping to move the national focus from measures of teacher inputs (i.e. degrees, certificates, etc.) to measures of their effectiveness in the classroom, an incredibly important contribution."

I’m proud to be part of the team that carries on Dr. Sanders’ work, which has positively impacted the lives of many students across America. If you also know Bill, please share a story or quote below to congratulate him on a life of innovation and service.

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Child welfare experts urge data sharing and the use of analytics to protect children, families

I remember when I first started in public child welfare 21 years ago and the word "outcomes" was introduced. At that time, we believed that if it felt good and children and families seemed happy that we were doing a good job - those were our outcomes. We were wrong. We now know the differences between outputs and outcomes and the importance of measuring multiple indicators to determine positive results and identify areas of improvement.

This point was brought home at the recent National Association of Public Child Welfare Administrators Annual Meeting. Fittingly, the tagline for the three day meeting was "Improvement, Reform, Impact". I applaud the state and local child welfare leaders who gathered throughout the weekend to learn and share new and innovative approaches to improving service and outcomes for children in child welfare systems.

Several major topics were covered, however, a key theme throughout the meeting was the importance and need to utilize data in an effort to enhance improvements and deepen impact. Topics included breaking down information silos to integrate data and improve decision making, the future of analytics and predictive modeling, mobilizing outcomes and using research and evidence to drive reforms.

It was heartening to see this as, even though we know the importance of measurement and evidence, many organizations have yet to create a results-oriented culture that prioritizes the use of data. Some states and many county administered agencies have yet to implement true Statewide Automated Child Welfare Information Systems (SACWIS), or case management systems that allow them to collect and analyze child and family specific data timely and accurately. How are they measuring success and better informing case practice?

Many public child welfare agencies have positioned themselves to truly analyze and use data from their case management systems to inform practice. Still, more work must be done to improve data sharing with other public agencies and create linkages that better inform practitioners when making life impacting decisions for children.

One expert stated "we are really, really far behind on how we share and use data" to benefit our most vulnerable population. Data linkages and data sharing across multiple public agencies can better inform the workforce and positively impact child welfare work for years to come. Some are doing this, but most are not.

In addition to linking and sharing data, state and local agencies must develop data-informed cultures that foster innovative and proactive case practice and service delivery. The primary goal must always be to prevent negative outcomes for children. This can be done via the use of predictive analytics to better inform government practice and drive child- and family-centered outcomes.

Predictive models are beginning to be developed in very few jurisdictions focused on risk of fatality or near-fatality, re-abuse, delayed permanency and failed reunifications. The use of predictive models provides workers and leaders with needed information to assist in the decision making process as to appropriate interventions, frequency and duration or interactions, and workload prioritization to name a few, all having a positive impact on outcomes for children and families.

One ex-state Commissioner and child welfare expert stated, “Predictive Analytics is the future of success in child welfare." Is the concept of predictive analytics today what outcomes was 21 years ago? If so, I hope that the field is prepared to act much quicker to improve services to children and families, proactively reform, and increase positive outcomes for our most vulnerable population.

The SAS State and Local Government practice is committed to partner with state and local leaders to innovate and change the way child welfare work is being done to ensure a lasting positive impact on children being touched by the foster care system. We believe data and analysis can help provide insight and tools for those striving to find the most positive outcomes for our children and youth and we are dedicated to finding ways to bring awareness and support to this critical issue.

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National Foster Care Month recognizes those striving to give kids stable lives, and bright futures

In 1988 President Ronald Reagan proclaimed May as National Foster Care Month as a way to recognize foster parents for opening their homes to and caring for children in need. This annual celebration has grown to generate awareness of foster care and a recognition of all involved. The children, foster parents, state and local government employees, private child caring providers, and the community at large are all important parts of the effort.

We have come a long way since 1988. Today there are more than 400,000 youth in foster care in the U.S., which represents a staggering 25% reduction in the just the past 10 years. In addition to the decrease in the number of children in foster care, we have the average length of stay has shrunk from 33 to 24 months.

This is a reflection of the sacrifice, dedication, and compassion of so many who have made working with foster youth their life’s mission. We also have to thank the many relatives that willingly accepted the additional burden of responsibility to love and nurture immediate and distant relatives. All involved in giving a young person hope and providing them with an opportunity to be successful in life are to be applauded.

Although there have been many improvements and successes, there is much work to be done to insure child safety and well-being for all youth. We must continue to innovate and seek out solutions that not only reduce the number of youth in foster care but focus on the quality of care for foster youth. The goal is to quickly place them in safe, stable, permanent situations.

The demand for loving families to accept the challenge to foster and/or adopt remains high. It has often been stated that if one family from each church in a state would adopt one child there would be no children awaiting permanent placement. Or, imagine the impact it would have if one family from each neighborhood in the United States became foster parents. What happened to the old adage “it takes a village to raise a child”?

The SAS State and Local Government practice is committed to working with state and local leaders to innovate and change the lives of children involved in the foster care system. We believe data and analysis can help those striving to find the most positive outcomes for kids, and we are dedicated to bringing awareness and support to this critical issue.

Our bloggers will continue to write about the different ways analytics could help at-risk kids. We would love to hear your thoughts on these topics and welcome comments.

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Fraud: An American health care epidemic

According to Time Magazine, the next Ebola outbreak will cost the World Bank in excess of $30 billion dollars. In 2014, America spent in excess of $1.16 million dollars to treat two victims of the dreaded disease.

While Ebola and other microorganisms of the deadly variety are scary creatures there is another far more sinister threat to the fiscal solvency of our land. If left untreated, this silent killer will infect every single state, city, and town across America. According to published reports, data scientists are feverishly working to find a cure to this dreaded epidemic, but to date, the problem is getting worse and few Americans realize it is even in their community.

So what is this silent killer that eclipses Ebola as an American Health Care Epidemic? Fraud

While there are many strains of fraud, the Medicare and Medicaid strains stand to cripple this nation with combined reported “programmatic losses” exceeding $60 billion dollars, year-over-year. That is DOUBLE the amount the World Bank cautions Ebola would cost, should it spread again.

In 2014, Medicaid (not including Medicare) cost Americans $488 billion dollars. According to, in 2014, the federal government published the “Improper Payment Rate” at 5.8% of the annual spend, or an alarming $28 billion in “programmatic losses”.

Note: ”Fraud” is not a word most like to say, so “programmatic losses” makes it sound less scary!

Most Americans realize that Medicaid plays a major role in our country’s health care delivery system, but the following statistics are not widely known by most of the populous:

  • Medicaid accounts for about one-sixth of all U.S. health care spending
  • 40 percent of Medicaid is composed of long-term care expenditures
  • Medicaid serves more than 66 million low-income Americans...
    • Including 32 million low-income children
    • Approximately 18 million adults and 16 million elderly and/or disabled
    • And more than 9.5 million low-income Medicare beneficiaries (dual eligible beneficiaries)

With passage of the Affordable Care Act (“Obamacare”), Medicaid enrollment rates are expected to increase by 5% across all US states. This massive increase in Medicaid recipients will cause Medicaid expenditures to exceed $1 trillion dollars, (yes, with a T), and the states will collectively share nearly $76 billion of the total costs to administer the program.

If the current published rate of 5.8% from 2014 holds true in 2015 and beyond, then America would “lose” $58 billion dollars in Medicaid alone.

So, what, if anything, is being done to manage this epidemic?

As a result of rising health care costs and an insidious fraud problem, states are increasingly moving away from the historical Fee-for-Service (FFS) payment model and outsourcing administration of Medicaid programs to Managed Care Organizations (MCO), as well as other risk and value-based payment models.

With this shift in the payment paradigm, states cannot merely assume that outsourcing to MCOs will cause the fraud epidemic to disappear with the legacy FFS system; rather, the incentives for fraud will only have changed and the Medicaid Program Integrity Units, Office of Inspector’s General, and Medicaid Fraud Control Units alike, will need to develop a clear strategy to combat the fraud epidemic in this new payment frontier.

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Spread the word! National Children’s Mental Health Awareness Day highlights an ongoing crisis

Everyone loves a “mental health” day, one of those days when we get to relax and escape from the everyday worries and stresses of life.

Imagine the challenge of dealing with true mental health issues everyday – especially as a child or youth where mental health issues can cause isolation, challenge the ability to learn, and create everyday frustrations. Nearly 4 million children in the U.S. suffer from a broad range of serious mental health disorders, including mood and anxiety disorders, autism, Tourette Syndrome, behavioral disorders, eating disorders, ADHD and others.

The outward signs of a disorder may change over time and can affect the child’s ability to learn and interact in school, create behaviors that inhibit healthy play, and impact friendships and family dynamics. Children with mental disorders may have problems handling emotions appropriately. Even so, these mental disorders can be difficult to diagnose and may not be correctly identified until school or teen-age years.

Without diagnoses and treatment, these conditions can interfere with healthy development and can have long-term impact during youth and adulthood.

Youth mental disorder sidebar-KayMeyer

May 7, 2015 is National Children’s Mental Health Awareness Day – a day focused on the importance of raising awareness about children’s mental health and showing that positive mental health is essential to a child’s healthy development from birth.

Why is this issue so critical to our nation?

Suicide is the third leading cause of death among youths 15-24 years of age and more than 90% of adolescents who have committed suicide have struggled with a mental health disorder. States spend nearly $1 billion annually on suicide and suicide attempts by youths.

Nearly 50% of students who suffer from a mental disorder drop out of school before completing high school. A rate higher than any other group with a disability.

And unfortunately, youth with mental disorders and those who are undiagnosed or misdiagnosed, are more likely to end up in juvenile detention. Estimates indicate that 65-75% of youths in juvenile detention suffer from one or more mental disorders. These youths need treatment rather than incarceration to provide the best chance at positive futures.

The Substance Abuse and Mental Health Services Administration marks the 10th annual National Children’s Mental Health Awareness Day with a series of events nationwide as well as opportunities for young adults to share their experiences with mental health issues, their resilience and their positive outcomes.

What can you do to spread awareness?

Mental health is a social issue that impacts all of us – from the costs of addressing the challenge to the social impact on our communities to, most importantly, the well-being and positive futures of our children. The SAS State and Local Government practice is committed to being a tireless force for the welfare of children. We recognize that improving the lives of children with mental disorders requires the input and collaboration of many individuals and organizations – families, friends, educators, healthcare providers, treatment programs and community and government leaders. We believe data and analysis can help provide insight and tools for those striving to find the most positive outcomes for our children and youth and we are dedicated to finding ways to bring awareness and support to this critical issue.

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What can we learn about at-risk kids to create more positive child welfare outcomes?

“What we do to our children they will do to society.”

Greek philosopher Pliny the Elder said that more than 2,000 years ago, and it’s just as true today. In 2013, more than 600,000 children in the US were confirmed victims of maltreatment in the home, according to U.S. Department of Health and Human Services Administration for Children and Families.

Source: The State of America’s Children – Children’s Defense Fund

Source: The State of America’s Children – Children’s Defense Fund

Of course, this does not account for the thousands, even millions, of unreported cases. What toll will this take on our society in the future?

I’ve taken a keen interest in child welfare, and as I’ve talked to leaders in child protective services departments and those in the trenches, it’s become very personal for me. This week, I am at the Child Welfare League of America 2015 National Conference to learn more about how that organization gives a powerful voice to the most vulnerable individuals in our society.

I have challenged my team to become a tireless force for child welfare. We know that the data exists for us to apply analytics to know more about the factors and relationships that lead to positive and negative outcomes for kids.

This requires government to take a longitudinal view of data and focus efforts where kids are most affected. And it should be a focus on quality, in areas such as education, health care (physical and mental), social programs and public safety.

Government tends to look at cost first. If we improve quality, cost improvements will follow. This will be in the forms of reduced recidivism, higher employment, fewer people on public assistance and better public services and safety.

Social workers on the front lines have such an important job and need our help

Even if things improve, child protective services workers will remain in the thick of the battle to save our kids. I recently met with a director of a county department of social services who impressed me greatly.

He told me his case workers want to be able to do what they learned in school. They want to take care of the kids and keep them safe. However, regulatory requirements and large caseloads make it difficult.  For instance, it would be helpful to have more information at their fingertips such as:

  • If a child is absent from school frequently
  • If they’ve changed schools multiple times
  • If a trauma assessment’s been done as a result of something in their current environment
  • If a current caregiver has a criminal background

Any and all of these could be indicative of an increase risk to a child.

The director says he would like as many data points as appropriate, governed by strict privacy and data sharing rules. Repeat maltreatments are all too common, and he believes helpful data would be found in areas such as juvenile justice, health care/pharmacy, education, absenteeism and a caregiver’s criminal history.

In addition, he’s worried about what happens to foster kids that age out. He would like to know which kids are at highest risk of aging out without finding a permanent home; and he’d like to know what happened to them. Did they end up in prison? Are they parents of the small kids now in his system? Or did they get good jobs and are thriving?

The data is out there to address his concerns and answer his questions. It’s there to help us save children, and put thousands more on paths to positive outcomes. I’m committed to helping this happen, and I will share more on this topic in the future.



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Imprisoned for tax fraud, the Phantom Preparer tells his story

Tax fraud…5-7 years in prison. I thought I had it all figured out. The government wades through millions of returns and tries to issue refunds quickly. Sure, I filed over a thousand for my clients, but that’s just a blip on their radar. I never thought I’d get caught. But I did, and as the evidence was presented at my trial it became clear that I underestimated the Department of Revenue, and their technology.

Since I’m already enjoying the hospitality of the state prison system, I may as well tell you my story. I’m the Phantom Preparer. I hatched what I thought was a low risk tax fraud scheme that netted me over a hundred thousand dollars. After two months bunking with a cell mate who bathes infrequently and talks to spiders, I can tell you…it wasn’t worth it.

It's a simple scheme. I would claim fake credits or large (overstated) deductions for my clients to get them huge refunds. I would take a cut, and everyone was happy. Maybe they knew something was fishy, maybe not. They sure didn’t complain about the windfall. And as word got around that I could score big refund checks, my clientele grew.

The problem is, more clients equals more data. And that’s like candy to sophisticated fraud analytics. As exhibit after exhibit was trotted out by the prosecutor, I got pretty sick of seeing that SAS logo pop up. SAS Analytics uncovered patterns that led investigators to my door.

Upon further review, that does look a little suspicious.

Upon further review, that does look a little suspicious.

I submitted more than 1,400 returns, all online, over three years. I never filled out the Preparer Tax Identification Number field, thus my secret identity as the Phantom Preparer. I figured with all the returns flooding in, who’s gonna notice? Right… Unfortunately, all those empty fields create a pattern.

You know what else is a red flag for DoR investigators? When someone goes from years of claiming little to no deductions to claiming more than $45,000.  More than 90% of my filed returns claimed refunds. In retrospect, I may have gotten a bit greedy. $10,000 in interest expenses? Sure! $12,000 in job-related expenses? OK!

I didn’t think they’d compare past years to the current claims. It just seemed like too much information to wade through. Not so much, I guess.

Also, all those returns were filed online from the same IP address. Mine. Whoops.

Not only that, at my trial they showed something called “geoboxing”. Basically, it was my house on an aerial map…surrounded by a cluster of the addresses on the fraudulent claims, and wouldn’t you know it? I was at the intersection of Tax Fraud Lane and Up The River Court. Lots of my neighbors were clients.

You can see my house from here!

You can see my house from here!

Unfortunately, investigators could also see a dozen of my clients' houses.

Unfortunately, investigators could also see a dozen of my clients' houses.









When the prosecutor was building their case, they even went back and matched the timing of the filings to my calendar. So, say I met with Bill Smith at 1:00pm on Feb. 20. Bill Smith’s return was filed an hour later. By itself, not a problem, but when that same pattern repeats over hundreds of meetings and fraudulent filings…uh-oh.

So, the evidence was overwhelming and I copped a plea. With good behavior I may be out in four years. I guess I’m not the Phantom Preparer anymore. I’m just Prisoner #4976113.

While inspired by true events, this blog post is a work of fiction. Any resemblance to actual events or persons, living, dead or imprisoned, is entirely coincidental. 

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Someone's trying to steal your tax refund... better call the math geeks!

Judging by the spike in media coverage of tax fraud, one might think accountants have suddenly been inspired by Breaking Bad re-runs, and turned en masse to lives of crime.

Umm… no. But, there are two good reasons for all the attention.

Source: 401(k) 2012,

Source: 401(k) 2012,

One reason is because of a new law – the Foreign Account Tax Compliance Act. This law requires non-US banks to disclose financial information to the IRS for accounts held by US citizens.

Why the fuss over an arcane-sounding law? The IRS is cracking down on wealthy citizens who hide their income in off-shore accounts. And they’ve had some high-profile successes. Take the case of Credit Suisse, a Swiss bank headquartered in Zurich. They were fined $2.6 billion for helping Americans to evade US tax obligations.

That makes for good headlines. But, it doesn’t fully explain the abundance of press coverage.

The other reason for the media attention is something that impacts most Americans directly. Fraudsters are plotting and scheming to steal your tax refund.

Huh?! How can someone steal your refund, when it is deposited directly into your bank account? Here’s how the scheme works:

  • A fraudster steals information about you. They don’t need a lot of information – just a few data points like name and Social Security number. If they are good, the fraudster might find out your employer’s name, too.
  • Next, the fraudster creates a fake tax return. He makes up an income amount, maybe even adds a few deductions or credits. He also creates a fake W2 that makes it seem like you had taxes withheld from your paycheck throughout the year.
  • Magically, the fake return always ends up with a refund balance.
  • Finally – and the key to the whole scheme – the fraudster submits the return electronically, and asks for a direct deposit of the refund. He provides a bank routing number for an account he controls. In a few days, the money gets deposited. The fraudster withdraws the money and disappears.

You’ve just been scammed.

No one realizes there’s a problem, until you try to submit your valid tax return. Your return gets rejected, and you are left to fight to get your (valid) refund.

This scheme is known as Stolen Identity Refund Fraud – or SIRF. It is plaguing taxpayers and governments across the US.

Government officials have battled tax refund fraud for many years. What’s different now is that a mix of technology, globalization, and identity theft are making it much easier for the bad guys to cheat the system.

Innovative government leaders are not sitting idly as this problem grows. Several innovative states are revolutionizing the fraud-fighting tools they use to tackle this challenge.

The Department of Revenue in a southern state uses highly sophisticated analytics to catch tax cheats. Their analytical models are similar to what banks and credit card companies are using to stop financial fraud – techniques such as anomaly detection, predictive modeling, and link analysis.

When a new tax return is filed, this state looks to see if there is an unusual change in circumstances from your previous returns. Same address? Same employer? Same general financial circumstance? Your return is assigned a low risk score and processed immediately. That’s the easy part.

The hard part comes when there are differences. About 12% of Americans move to a new address in a given year. The average American stays at a given job for only 4.4 years. It’s perfectly normal for people to get promotions and raises… get married… have children… all events that can have a material impact on what your report on your tax return.

Analytics make these hard decisions easier. This state is able to figure out which changes are part of everyday, normal life… and which ones are unusual and may indicate someone is trying to steal your refund.

Suddenly stopped claiming your 3 kids as deductions? That’s odd. Reporting wages from a company that is no longer in business? Seems strange. Your new bank routing number is for a bank based in Nigeria? Or Russia? A return with these types of anomalies is assigned a high risk score. Some such returns are rejected automatically. For others, the Department of Revenue contacts the taxpayer to see if the return is valid.

Analytics are helping protect taxpayers from SIRF. And, they are helping speed up payment of valid refunds. That’s a classic case of good government at work. Every state should harness the power of math to protect and serve its citizens.

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Analytics can ease the burden on social workers & help protect kids

March is national Social Work Month and this year the National Association of Social Workers celebrates its 60th anniversary of facilitating positive social changes and improving the lives of individuals and families.

Social work is a profession that considers the needs of others every day. Individuals who dedicate themselves to a career in social work focus their time and effort on the quality of life and well-being of families, children and others in need. Social workers support society’s most vulnerable during times of crisis, poverty, abuse, mental and physical disability, and social injustice. It is a noble profession that is often overlooked and under-appreciated.

Many data sources can help improve outcomes for kids (click to enlarge)

Many data sources can help improve outcomes for kids (click to enlarge)

Case workers across our country, specifically those working with child abuse and neglect cases, often face significant challenges in protecting the children in their care. The headlines are tragic and the statistics are startling. 3 million reports of child abuse and neglect are filed in the US every year – nearly a report every 10 seconds and more than four children die every day as a result of child abuse.

Case workers are confronted with overwhelming caseloads and limited access to critical information about the children in their care. With limited resources, it becomes difficult to monitor ever-changing circumstances related to a case and to proactively identify changes in a child’s risk.   Case workers need better tools and more timely access to information to help them assess children and family situations and make decisions based on comprehensive information.

A key focus area of the SAS State and Local Government Practice this year is a commitment to improving positive outcomes for children throughout the nation. We are focusing technology efforts on minimizing negative outcomes and maximizing positive outcomes for children.

SAS technology integrates data from a variety of sources to consolidate information about a child and identify key relationships in the child’s environment. This produces an overall risk score for the child. Those data sources are monitored for changes that might affect a child’s risk score such as extended absences from school, criminal history of someone in the household, or changes in access to key social services.

The goal is to put critical insights into the hands of case workers – providing them with ready access to timely, reliable, and actionable information. It reduces the time case workers need to spend gathering data and enables more time interacting with children and their families. Organization leadership gains better insight into their case portfolio enabling better triage, assignment and resource allocation to improve the management and outcomes of their child services cases.

Social workers who protect our most vulnerable face enormous challenges every day. SAS is committed to supporting their efforts in improving the lives of these children.

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