Palantir, a data-mining technology developed by Peter Thiel and funded by a venture capital firm closely connected with the CIA, gained its foothold in government contracting during the "War on Terror" by finding terrorist cells and predicting improvised explosive device (IED) attacks on U.S. forces. As a young captain deployed to Helmand Province, Afghanistan, I saw the effectiveness of Palantir and its ability to spot patterns amongst seemingly random sets of data first hand. Palantir gave us the ability to see the frequency and location of IED attacks, identify the location of terrorist cells, and monitor information about high-value targets and detainees. This data was used to influence battlefield decisions in real time so that effort could be expended in areas that would cause the highest impact.
After its success on the battlefield, Palantir Technologies heavily marketed its Palantir Platform to government programs and landed big government contracts with federal agencies, the Department of Defense, and local law enforcement, including a recent $876 million Army contract. It was not long before Palantir caught the attention of the Department of Health and Human Services (HHS) as a tool to combat rising prescription drug fraud.
HHS uses Palantir to wrangle massive sets of healthcare data to spot fraud waste and abuse, including the over-prescribing of opiate medications. By analyzing Medicare claims data, Palantir can monitor which physicians are prescribing the most medications to determine who requires additional scrutiny and potential federal prosecution. By creating maps with hotspots of drug activity, Palantir can show regulators where to deploy their resources to combat prescription fraud. Just recently, Attorney General Sessions announced the creation of the Prescription Interdiction and Litigation Task Force and deployed 12 experienced Assistant U.S. Attorneys to opioid "hot spots." The focus of this task force will no doubt be guided by Palantir data.
Federal healthcare programs account for about $1 trillion in federal spending annually, and estimates suggest that 10% of that spending constitutes fraud. Anti-fraud spending has paid dividends back to the government and the Department of Justice recovered $2.6 billion from healthcare fraud schemes in 2017. However, quickly detecting potential fraud for the purposes of healthcare fraud prosecution has been a thorn in the side of regulators. Medicare receives 4.6 million claims per day. It would be cost prohibitive to monitor each claim to determine whether claims are fraudulent. Traditional federal investigations take years, cost millions, and often do not net results – until Palantir that is.
Palantir utilizes open-source data such as U.S. Census Data and studies conducted by other government and private organizations to determine a "baseline," essentially looking for what constitutes the normal practice of medicine. As Meaningful Use and MACRA pulls the medical profession into the digital world, Palantir has a wealth of patient data at its disposal. Palantir then cross-references varying sets of Medicare data to determine which providers statistically deviate from the norm amongst large data sets. For instance, Palantir can analyze prescription data to determine which providers rank the highest in opiate prescribing for a local area. Palantir can then cross-reference those claims against patient location data to determine if the providers' patients are traveling long distances for opiates. Palantir can further analyze the data to determine if the patient population of a provider has been previously treated by a physician on the Office of Inspector General exclusion database (due to prior misconduct) which would indicate that the patients are not "legitimate."
By using "big data" to determine which providers deviate from statistical trends, Palantir can provide a more accurate basis for a payment audit, generate probable cause for search warrants, or encourage a federal grand jury to further investigate a provider's activities. After the government obtains additional provider-specific data, Palantir can analyze specific patient files, cell phone data, email correspondence, and electronic discovery. Investigators can review cell phone data and email correspondence to determine if networks exist between providers and patients and determine the existence of a healthcare fraud conspiracy or patient brokering.
While Palantir's applications may be effective in combating the opiate epidemic, Palantir has been the subject of privacy and transparency concerns. In March, the mayor of New Orleans Mitch Landrieu ended the city's relationship with Palantir Technologies after criticism over its "predictive policing technology." The use of Palantir to combat crime in New Orleans was discovered after prosecutors failed to hand over documents related to Palantir's involvement in a gang investigation. Digital privacy advocates are concerned that the use of big data, even for law enforcement purposes, raises significant privacy concerns. In response, Palantir launched the council on privacy and civil liberties to attempt to alleviate those concerns. Specifically, in the healthcare context, providers are concerned that they must now practice medicine in a way that does not deviate from the statistical norm in order to avoid undue scrutiny, costly audit defense, or even criminal prosecution. If providers are required to make patient care decisions about the length of hospital admission, dosage of medications, or number of surgeries on a macro scale, it may sacrifice patient care, lead to worse patient outcomes, or restrict access to care in some communities.
Ronald W. Chapman II is a shareholder at , a multistate healthcare law firm. He is a defense attorney focusing on healthcare fraud and physician over-prescribing cases as well as related OIG and DEA administrative proceedings. Ron is a former United States Marine Judge Advocate and was previously deployed to Afghanistan in support of Operation Enduring Freedom.