Machine Learning Algorithms with Big Medicare Fraud Data

Healthcare is an integral component in peoples lives, especially for the rising elderly population, and must be affordable. The United States Medicare program is vital in serving the needs of the elderly. The growing number of people enrolled in the Medicare program, along with the enormous volume of money involved, increases the appeal for, and risk of, fraudulent activities. For many real-world applications, including Medicare fraud, the interesting observations tend to be less frequent than the normative observations. This difference between the normal observations and
those observations of interest can create highly imbalanced datasets. The problem of class imbalance, to include the classification of rare cases indicating extreme class
imbalance, is an important and well-studied area in machine learning. The effects of class imbalance with big data in the real-world Medicare fraud application domain, however, is limited. In particular, the impact of detecting fraud in Medicare claims is critical in lessening the financial and personal impacts of these transgressions. Fortunately, the healthcare domain is one such area where the successful detection
of fraud can garner meaningful positive results. The application of machine learning techniques, plus methods to mitigate the adverse effects of class imbalance and rarity, can be used to detect fraud and lessen the impacts for all Medicare beneficiaries. This dissertation presents the application of machine learning approaches to detect Medicare provider claims fraud in the United States. We discuss novel techniques
to process three big Medicare datasets and create a new, combined dataset, which includes mapping fraud labels associated with known excluded providers. We investigate the ability of machine learning techniques, unsupervised and supervised, to detect Medicare claims fraud and leverage data sampling methods to lessen the impact of class imbalance and increase fraud detection performance. Additionally, we extend the study of class imbalance to assess the impacts of rare cases in big data for Medicare fraud detection.