Legal Definitions - computer matching

Computer matching refers to the automated process of comparing digital information stored in two or more distinct computer systems. The primary goal is to identify records that are common to both systems, or to uncover inconsistencies and discrepancies between them, often to verify information, prevent fraud, or improve data accuracy.

Here are some examples illustrating how computer matching is used:

• Identifying Loan Defaulters: A federal student loan agency might use computer matching to identify individuals who have defaulted on their student loans but are currently employed. The agency would compare its database of loan defaulters (containing names, Social Security numbers, and loan statuses) with a national database of employed individuals (perhaps derived from tax records or employment reports). By matching common identifiers, they can pinpoint individuals who appear in both systems, allowing them to prioritize collection efforts or offer income-driven repayment options.

• Financial Sanctions Compliance: A large financial institution, such as a bank, must comply with anti-money laundering (AML) regulations and international sanctions lists. To do this, the bank regularly performs computer matching by comparing its entire customer database (including names, addresses, and account details) against government-issued lists of sanctioned individuals and entities (like the OFAC Specially Designated Nationals list). This process helps the bank identify if any existing customers are on a sanctions list, preventing illegal transactions and ensuring regulatory compliance.

• Healthcare Billing Accuracy: A hospital system might utilize computer matching to ensure all medical services provided to patients are accurately billed. They would compare their patient treatment records (which detail procedures performed, medications administered, and dates of service) with their billing system records. Computer matching can highlight instances where a service appears in the treatment record but has not yet been entered into the billing system, or vice versa, helping to catch errors, prevent revenue loss, and ensure complete and accurate billing.