CMS Announces Winner of AI Fraud Detection Competition

On December 15, the Centers for Medicare and Medicaid Services (“CMS”) announced the winner of its “Crushing Fraud Chili Cook-Off Competition.” The competition amounted to a hack-a-thon wherein ten competitors submitted proposals in a “market-based research challenge” to develop machine learning models that detect indicators of fraud in Medicare claims data. The winner was Milliman, Inc., an actuarial firm, whose proposal leveraged explainable AI to “flag statistical anomalies in provider billing” and explain “the underlying factors, empowering investigators to make informed decisions while maintaining human oversight.” The model’s output includes “a single risk score: a composite metric that combines behavioral, network, and financial anomalies into an actionable score for CMS officials.” CMS asserts that the competition details and submissions are exempt from the Freedom of Information Act but plans to release a white paper in the near future to summarize takeaways from the competition and potential next steps to implement similar features to support oversight of federal health care programs.