Application of Standard Machine Learning Models for Medicare Fraud Detection with Imbalanced Data
Bibliographic record
Abstract
Medicare fraud poses a substantial challenge to healthcare systems, resulting in significant financial losses and undermining the quality of care provided to legitimate beneficiaries. This study investigates the use of machine learning (ML) to enhance Medicare fraud detection, addressing key challenges such as class imbalance, high-dimensional data, and evolving fraud patterns. A dataset comprising inpatient claims, outpatient claims, and beneficiary details was used to train and evaluate five ML models: Random Forest, KNN, LDA, Decision Tree, and AdaBoost. Data preprocessing techniques included resampling SMOTE method to address the class imbalance, feature selection for dimensionality reduction, and aggregation of diagnostic and procedural codes. Random Forest emerged as the best-performing model, achieving a training accuracy of 99.2% and validation accuracy of 98.8%, and F1-score (98.4%). The Decision Tree also performed well, achieving a validation accuracy of 96.3%. KNN and AdaBoost demonstrated moderate performance, with validation accuracies of 79.2% and 81.1%, respectively, while LDA struggled with a validation accuracy of 63.3% and a low recall of 16.6%. The results highlight the importance of advanced resampling techniques, feature engineering, and adaptive learning in detecting Medicare fraud effectively. This study underscores the potential of machine learning in addressing the complexities of fraud detection. Future work should explore explainable AI and hybrid models to improve interpretability and performance, ensuring scalable and reliable fraud detection systems that protect healthcare resources and beneficiaries.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.010 | 0.022 |
| Meta-epidemiology (narrow) | 0.001 | 0.000 |
| Meta-epidemiology (broad) | 0.001 | 0.001 |
| Bibliometrics | 0.003 | 0.002 |
| Science and technology studies | 0.001 | 0.001 |
| Scholarly communication | 0.002 | 0.002 |
| Open science | 0.002 | 0.001 |
| Research integrity | 0.001 | 0.002 |
| Insufficient payload (model declined to judge) | 0.001 | 0.001 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".