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Claims Fraud Detection

Using AI to Stop $100 Billion in Fraudulent Healthcare Claims


The U.S. Justice Department estimates that 3% of healthcare claims in the United States, worth almost a hundred billion dollars, are fraudulent. Investigating claims is time consuming and expensive with payers pursuing fraudulent cases for months or years after payments have been made. Fraudulent claims contribute to the increased cost of care, slow down valid claims, and lead to higher healthcare premiums for patients. Traditional manual review doesn’t scale across billions of claims per year and rules-based fraud detection systems are expensive and slow to adapt to new fraud techniques.


AI is ideally suited to fraud detection for medical claims. Machine learning models can be used to automate claims assessment and routing based on existing fraud patterns. This process flags potentially fraudulent claims for further review, but also has the added benefit of automatically identifying good transactions and streamlining their approval and payment. More advanced anomaly detection systems can be deployed to find new patterns and to flag those for review, which leads to prompt investigation of new fraud types. AI systems can also provide clear reason codes for investigators, so they can quickly see the key factors that led the AI to indicate fraud which streamlines their investigation. With AI based fraud detection, fraudulent claims can be evaluated and flagged before they are paid, which reduces costs for payers, helps keep costs lower for patients and helps catch fraudsters in the act.


The mission at is to democratize AI for all so that more people across industries can use the power of AI to solve business and social challenges. The healthcare industry is a key focus for the company with an initiative to help develop AI healthcare solutions including dedicated, experienced resources for customers, driving healthcare AI events and meetups for healthcare professionals, and membership in Health IT Now, the leading coalition of patient groups, provider organizations, employers, insurers, and other stakeholders. is already working with top healthcare companies including Change Healthcare, Armada Health, Kaiser Permanente, and HCA, and its products include industry leading features for machine learning interpretability required by the healthcare industry for compliance purposes.

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H2O has been the driver for building models at scale. We are talking about billions of claims. You can't do this with standard off the shelf open source techniques.”

Adam Sullivan, Director, Change Healthcare
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With H2O we are building models to improve the patient experience in our hospitals and improve the nursing and doctor workflows as well.”

Allison Baker, Data Scientist, HCA