Medicaid Fraud Detection:
$1.09 Trillion, 617K Providers,
34,710 Red Flags
Multi-dimensional analysis of $1.09 trillion in Medicaid provider spending across 617,503 billing providers over 84 months (2018–2024). Combining statistical z-scores, Isolation Forest ML, and geographic clustering to identify 34,710 high-risk providers accounting for 43% of all spending.
Total Paid
$1.09T
2018–2024
Total Claims
18.8B
Individual claims
Providers
617K
Unique billing NPIs
Flagged (3+)
34,710
43% of all spending
Top Billing Providers
The 10 largest billing providers account for a disproportionate share of total Medicaid spending. Organizations dominate at 96.2% of all spending, while individual providers account for just 3.1%.
Entity Type Breakdown
Top 10 Billing Providers by Total Spending
| # | Provider | State | Total Paid | Avg/Claim |
|---|---|---|---|---|
| 1 | Public Partnerships LLC | NY | $7.18B | $79.95 |
| 2 | LA County Dept of Mental Health | CA | $6.78B | $219.57 |
| 3 | Tempus Unlimited, Inc. | MA | $5.57B | $87.71 |
| 4 | ModivCare Solutions, LLC | CO | $3.09B | $28.71 |
| 5 | Freedom Care LLC | NY | $3.03B | $137.68 |
| 6 | GuardianTrac LLC | MI | $2.68B | $75.47 |
| 7 | TN Dept of IDD | TN | $2.60B | $158.79 |
| 8 | AL Dept of Mental Health | AL | $2.25B | $1,156.32 |
| 9 | Consumer Direct Care Network VA | MT | $2.11B | $95.02 |
| 10 | County of Santa Clara | CA | $1.73B | $371.23 |
Notable: Alabama Dept of Mental Health averages $1,156 per claim — significantly higher than peers — warranting further investigation.
Where the Money Goes: Top Procedure Codes
Top HCPCS Codes by Total Spending
| Code | Description | Total ($B) | Avg/Claim | Claims |
|---|---|---|---|---|
| T1019 | Personal care services | $122.7B | $111.52 | 1.1B |
| T1015 | Clinic visit/encounter | $49.2B | $152.54 | 322M |
| T2016 | Habilitation (residential) | $34.9B | $505.87 | 69M |
| 99213 | Office visit (est. patient) | $33B | $43.18 | 764M |
| S5125 | Attendant care services | $31.3B | $78.74 | 398M |
| 99214 | Office visit (detailed) | $29.9B | $59.53 | 503M |
Most Overpriced Procedures (Avg Cost per Claim)
Notable
Personal care services (T1019) alone account for $122.7 billion (11.2% of all spending), making it the single largest category and a high-priority target for fraud auditing. High-cost injection/infusion codes (J-codes) with very few providers are prime candidates for overcharging.
The Billing/Servicing NPI Gap
38.6% of all Medicaid spending involves a billing entity different from the servicing provider. While many represent legitimate billing arrangements, systematically high mismatch rates can indicate shell billing companies, kickback arrangements, or billing fraud.
Same NPI
61.4%
$671.1B
Different NPI
38.6%
$422.5B
Spending Split
Extreme Claims-per-Beneficiary Outliers
1952915910
Saint Louis, MO
claims/beneficiary
1417409509
Houston, TX
claims/beneficiary
1144989351
Detroit, MI
claims/beneficiary
The 99th percentile for claims per beneficiary is 24.6. These providers exceed that threshold by 10–20x, indicating potential phantom billing or extreme upcoding.
Multi-Layered Fraud Detection
This analysis employs five independent detection methods: statistical z-scores across 6 dimensions, Isolation Forest machine learning (200 estimators, 2% contamination), geographic anomaly detection, composite fraud scoring, and multi-flag intersection across 8 binary indicators.
Multi-Flag Distribution
Providers with 3+ Flags
34,710
5.7% of all providers
Their Combined Spending
$470.8B
43% of total Medicaid spending
Isolation Forest ML Results
12,119
providers (2.0%) classified as anomalous
Trained on 19 features including geographic deviations and spending volatility. Correlation with statistical z-scores: r = 0.43–0.53, validating that both methods detect similar patterns.
Top 10 Highest-Risk Providers
| # | NPI | Location | Total Paid | Score | Key Anomaly |
|---|---|---|---|---|---|
| 1 | 1073569034 | Irving, TX | $27.7M | 75.34 | $83,133 avg/claim (3,004x geographic avg) |
| 2 | 1952915910 | Saint Louis, MO | $717K | 33.25 | 497 claims/beneficiary |
| 3 | 1376609297 | Stoughton, MA | $5.57B | 32.90 | 63.5M claims, 19 claims/benef. |
| 4 | 1861568107 | Berwyn, PA | $35.0M | 24.43 | $29,034 avg/claim |
| 5 | 1831567858 | Columbia, SC | $13.3M | 24.40 | $31,680 avg/claim |
| 6 | 1124494059 | Nashville, TN | $781.0M | 23.02 | $857 avg/claim, 911K claims |
| 7 | 1568936557 | Milton, WA | $678K | 18.19 | $22,605 avg/claim (30 claims) |
| 8 | 1235261652 | San Leandro, CA | $30.6M | 18.00 | $19,492 avg/claim |
| 9 | 1013030808 | Merced, CA | $47.6M | 17.70 | $18,464 avg/claim |
| 10 | 1417409509 | Houston, TX | $549K | 17.04 | 261 claims/beneficiary |
Provider #1 (Irving, TX) has a fraud score of 75.34 — more than double #2. Their avg per claim of $83,133 is 3,004x the geographic average. Provider #2 (Saint Louis, MO) billed 497 claims per beneficiary — a classic indicator of phantom billing.
State-Level Geographic Analysis
Top 5 States by Total Spending
| # | State | Providers | Spending | Avg/Claim |
|---|---|---|---|---|
| 1 | NY | 59,321 | $144.8B | $86.04 |
| 2 | CA | 52,782 | $129.4B | $50.83 |
| 3 | TX | 31,254 | $56.2B | $50.5 |
| 4 | MA | 19,346 | $56.0B | $70.92 |
| 5 | NJ | 15,992 | $47.0B | $59.87 |
Most Anomalous States
Minnesota
Highest claims/beneficiary (4.39), 66% mismatch rate
anomaly score
Alaska
Highest avg/claim ($158.56), highest $/provider ($3.32M)
anomaly score
Maine
Very high avg/claim ($185.39), highest $/provider ($3.72M)
anomaly score
US Virgin Islands
Extremely high avg/claim ($247.91)
anomaly score
Arizona
High avg/claim ($184.28)
anomaly score
Key Finding
Minnesota is the most anomalous state overall, driven by the nation’s highest claims-per-beneficiary ratio (4.39) and a 66% billing mismatch rate. This finding is reinforced by Minnesota appearing in 4 separate geographic fraud clusters. Least anomalous: Illinois (-1.50), Puerto Rico (-1.32), Pennsylvania (-0.89).
Geographic Fraud Clusters
DBSCAN clustering on provider fraud feature vectors identifies 15 regional clusters of providers with similar anomalous behavior — potential coordinated fraud rings.
Major Clusters by Spending
| State | Providers | Spending | Key Cities | Mismatch |
|---|---|---|---|---|
| NC | 3,168 | $16.9B | Charlotte, Raleigh, Greensboro | 20.5% |
| AZ | 1,873 | $15.1B | Phoenix, Tucson, Mesa | 24.4% |
| MN | 1,754 | $13.6B | Minneapolis, Saint Paul, Rochester | 40.7% |
| NM | 420 | $6.1B | Albuquerque, Las Cruces | 27.8% |
| ME | 417 | $5.9B | Portland, Bangor, Lewiston | 29.2% |
Highest Fraud Score Clusters (Investigation Priority)
Mahnomen, Farmington, Redlake
Small group, extreme scores
Ponemah, Moorhead, Bemidji
Northern MN rural cluster
Roseville, Saint Cloud, Rochester
100% mismatch rate
Waterville, South Portland, Augusta
Highest spike z-score (8.46)
Pattern
The small Minnesota clusters (MN-0, MN-1, MN-2) with 3–6 providers each and fraud scores of 4.57–8.49 are the highest-priority targets. Their small size and geographic concentration are consistent with organized billing schemes.
City-Level Hotspots
Top 10 Cities by % Providers Flagged (min. 20 providers)
Geographic Patterns
South Florida (Hialeah Gardens 42%) remains a historically known Medicaid fraud hotspot. Minnesota (Brooklyn Center 35.5%, Mendota Heights 34.8%) has 3 cities in the top 20. North Carolina (Windsor, Pembroke) aligns with the state’s largest fraud cluster. Missouri (Caruthersville 40.5%, Ferguson 35%) shows rural/small-city hotspots.
Deactivated NPI Analysis
Deactivated NPIs in Data
1,641
$3.8B in spending
Full Dataset Deactivated
10,269
$7.1B · 126.5M claims
Flagged Deactivated NPI
1720471568
Brooklyn, NY
$293.4M
fraud score: 4.89
Context
While some deactivated NPI spending may represent legitimate pre-deactivation billing, $7.1 billion flowing through 10,269 deactivated provider numbers demands systematic review.
Key Findings & Recommendations
Spending concentration
$470.8B
in spending (43% of all Medicaid expenditure) concentrated among just 34,710 providers (5.7%) with 3+ fraud flags. This disproportionate concentration indicates systemic risk.
Minnesota
#1
Most anomalous state nationally. Highest claims/beneficiary (4.39), 66% NPI mismatch rate, 4 separate fraud clusters, and 3 cities in the top-20 flagged list. Small MN clusters (3–6 providers with scores 4.57–8.49) are consistent with organized fraud rings.
Extreme outlier
75.34
fraud score for Provider #1 (Irving, TX) — their average claim of $83,133 is 3,004x the geographic average. Provider #2 (Saint Louis, MO) billed 497 claims per beneficiary — a classic phantom billing indicator.
South Florida
42%
of providers flagged in Hialeah Gardens, FL — continuing the historically documented pattern of elevated Medicaid fraud in the region.
Deactivated NPIs
$7.1B
in spending by 10,269 deactivated provider NPIs. While not all fraudulent, the volume demands systematic review.
Billing mismatch
38.6%
of all spending ($422.5B) flows through billing entities different from servicing providers, creating opacity that facilitates fraud.
Recommended Investigation Priorities
Tier 1 — Immediate
2 providers with 8 flags · 120 providers with 7+ flags · Small MN clusters (avg scores >4.5) · Provider NPI 1073569034 (score 75.34)
Tier 2 — High Priority
Top 500 flagged providers · Deactivated NPIs with >$10M spending · Cities with >30% flagging rate · Providers with >100 claims/beneficiary
Tier 3 — Systematic Review
Minnesota statewide audit · ND/OK billing mismatch patterns · J-code billing (few providers, high costs) · Personal care services T1019 ($122.7B)
Bottom line
This expanded analysis confirms and deepens the findings from Part I. With 84 months of data and $1.09 trillion in spending, the patterns are unmistakable: a small fraction of providers handle disproportionate volumes, geographic clusters suggest coordinated schemes, and billions flow through deactivated or mismatched billing entities. Targeted auditing of fewer than 35,000 providers could address 43% of all Medicaid expenditure.
Methodology Note
This analysis uses CMS Medicaid Provider Utilization & Spending data and NPPES NPI Registry. The dataset contains 227,083,361 records spanning 84 months (2018-01 to 2024-12), covering 617,503 unique billing providers and 10,881 HCPCS procedure codes.
NPI enrichment
Spending data enriched with NPI registry data (state, city, entity type, org name, deactivation date, taxonomy) via LEFT JOIN. Match rate: 99.5% billing NPIs, 94.2% servicing NPIs.
Statistical z-scores
Per-provider z-scores across 6 dimensions: overcharging, over-utilization, NPI mismatch, low code diversity, geographic deviation (price & volume), and spending volatility.
Isolation Forest
200 estimators, 2% contamination rate, trained on 19 provider-level features. Captures non-linear fraud patterns that z-scores miss.
DBSCAN clustering
Applied within top 10 anomalous states on standardized fraud feature vectors to detect geographic concentrations of similar anomalous behavior.
Composite scoring
Weighted ensemble combining z-scores, Isolation Forest anomaly scores, geographic deviations, and NPI mismatch rates. Multi-flag thresholds: top 5% per dimension across 8 independent indicators.
Limitations
Statistical flags ≠ fraud
Anomalous patterns may have legitimate explanations (specialty providers, group billing structures, high-acuity patient populations). Each case requires individual clinical review.
No clinical context
The dataset lacks diagnosis codes, patient demographics, and clinical justification necessary for definitive fraud determination.
Ecological inference
Geographic clusters identify correlated anomalies, not proven coordination. Provider proximity does not prove organized fraud.
This analysis is for informational and research purposes only. Statistical anomalies identified here should not be interpreted as evidence of fraud without further investigation. Data sources: CMS Medicaid Provider Utilization and Payment Data, NPPES NPI Registry.