ABSTRACT
Defending the New York State Department of Social Services the executive deputy commissioner, in 1991, produced a fine example of defense by display of functional apparatus. He argued that the Department of Social Services used an impressive array of apparatus to control fraud, including identification processes; front-end controls limiting program access; and extensive application of technology. When news of scandalous fraud losses comes to the fore, industry executives often deflect criticism from their own agencies through what might be termed defense by display of functional apparatus. The traditional types of controls, commonly used throughout the industry, are claims processing, involving human claims examiners and automated edits and audits; prepayment medical review; post-payment utilization review; and audits of one kind or another. Once humans have a chance to inspect claims, the prospects for fraud detection and referral improve tremendously. When post-utilization review establishes a provider’s behavior as extreme or peculiar in some regard, a formal audit may result.
