Outlier detection in healthcare fraud: A case study in the Medicaid dental domain

Guido van Capelleveen, Mannes Poel, Roland M. Mueller, Dallas Thornton, Jos van Hillegersberg*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

76 Citations (Scopus)
268 Downloads (Pure)


Health care insurance fraud is a pressing problem, causing substantial and increasing costs in medical insurance programs. Due to large amounts of claims submitted, estimated at 5 billion per day, review of individual claims or providers is a difficult task. This encourages the employment of automated pre-payment controls and better post-payment decision support tools to enable subject matter expert analysis. This paper presents how to apply unsupervised outlier techniques at post-payment stage to detect fraudulent patterns of received insurance claims. A special emphasis in this paper is put on the system architecture, the metrics designed for outlier detection and the flagging of suspicious providers which may support the fraud experts in evaluating providers and reveal fraud. The algorithms were tested on Medicaid data encompassing 650,000 health-care claims and 369 dentists of one state. Two health care fraud experts evaluated flagged cases and concluded that 12 of the top 17 providers (71%) submitted suspicious claim patterns and should be referred to officials for further investigation. The remaining 5 providers (29%) could be considered mis-classifications as their patterns could be explained by special characteristics of the provider. Selecting top flagged providers is demonstrated to be a valuable as an targeting method, and individual provider analysis revealed some cases of potential fraud. The study concludes that, through outlier detection, new patterns of potential fraud can be identified and possibly utilized in future automated detection mechanisms.
Original languageEnglish
Pages (from-to)18-31
Number of pages14
JournalInternational journal of accounting information systems
Publication statusPublished - Jun 2016
Event16th International Conference on Enterprise Information Systems, ICEIS 2014 - Lisbon, Portugal
Duration: 27 Apr 201430 Apr 2014
Conference number: 16


  • Decision support
  • Outlier Detection
  • Medical fraud detection
  • 2023 OA procedure


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