Geographic Risk Hotspots
Where do fraud signals concentrate? We normalized flagged provider counts by state population to find where suspicious billing is most dense. The results are surprising: it's not always the biggest states that have the most problems.
1.08
Highest per 100K (VT)
114
Most total flags (NY)
$2,411
Highest $/capita (MA)
982
Total flags nationwide
When people think of Medicaid fraud hotspots, they often think of large states like New York, California, or Texas. And in absolute numbers, they're right: New York leads with 114 flagged providers, followed by California (104) and Arizona (71). But raw counts obscure a more revealing picture.
Small states, high rates
When we normalize by population, Vermont leads with 1.08 flagged providers per 100,000 residents — nearly 2× the rate of New York. The District of Columbia (1.03) and Maine (1.00) round out the top three.
Arizona stands out as a large-population state with an unusually high per-capita rate of 0.96 per 100K — driven by the influx of new behavioral health clinics billing massive amounts. With 71 flagged providers across 7.4M residents, Arizona's rate is nearly 4× that of similarly-sized states like Ohio (0.31) and Pennsylvania (0.28).
Spending doesn't always correlate with flags
Massachusetts spends the most per capita at $2,411/person, but ranks only 9th in flags per capita (0.67). Meanwhile, Nevada has a high flag rate (0.78) despite relatively low Medicaid spending ($302/person). This suggests that flag rates reflect billing behavior patterns, not just spending volume.
Another striking pattern: Nevada gets 21 of its 25 flags from the ML model rather than statistical tests — the highest ML-to-statistical ratio of any state. Maryland is similar, with 11 ML flags vs 11 statistical flags. This may indicate different types of anomalies in these states — patterns that traditional rule-based tests miss but machine learning picks up.
Top 15 States by Flags Per 100K Population
| # | State | Flags/100K | Flagged | Spending/Capita | Population |
|---|---|---|---|---|---|
| 1 | Vermont | 1.08 | 7 | $1,439 | 647,464 |
| 2 | District of Columbia | 1.03 | 7 | $1,657 | 678,972 |
| 3 | Maine | 1.00 | 14 | $901 | 1,395,722 |
| 4 | Arizona | 0.96 | 71 | $901 | 7,431,344 |
| 5 | Alaska | 0.95 | 7 | $1,230 | 733,406 |
| 6 | Delaware | 0.87 | 9 | $846 | 1,031,890 |
| 7 | New Hampshire | 0.86 | 12 | $687 | 1,402,054 |
| 8 | Nevada | 0.78 | 25 | $302 | 3,194,176 |
| 9 | Massachusetts | 0.67 | 47 | $2,411 | 7,001,399 |
| 10 | West Virginia | 0.62 | 11 | $832 | 1,770,071 |
| 11 | New York | 0.58 | 114 | $1,824 | 19,571,216 |
| 12 | Rhode Island | 0.55 | 6 | $1,030 | 1,095,962 |
| 13 | Kansas | 0.54 | 16 | $240 | 2,940,546 |
| 14 | New Mexico | 0.52 | 11 | $973 | 2,117,522 |
| 15 | New Jersey | 0.50 | 46 | $1,059 | 9,290,841 |
Top 15 States by Total Flag Count
| # | State | Flagged | Statistical | ML | Total Spending |
|---|---|---|---|---|---|
| 1 | New York | 114 | 106 | 8 | $35.70B |
| 2 | California | 104 | 99 | 5 | $30.89B |
| 3 | Arizona | 71 | 68 | 3 | $6.69B |
| 4 | Texas | 61 | 57 | 4 | $9.24B |
| 5 | Massachusetts | 47 | 43 | 4 | $16.88B |
| 6 | New Jersey | 46 | 44 | 2 | $9.84B |
| 7 | Ohio | 37 | 32 | 5 | $7.00B |
| 8 | Pennsylvania | 36 | 36 | 0 | $3.66B |
| 9 | Florida | 33 | 28 | 5 | $2.78B |
| 10 | Nevada | 25 | 4 | 21 | $965.4M |
| 11 | Michigan | 24 | 22 | 2 | $8.18B |
| 12 | Tennessee | 23 | 18 | 5 | $7.34B |
| 13 | Kentucky | 22 | 18 | 4 | $3.54B |
| 14 | Maryland | 22 | 11 | 11 | $1.17B |
| 15 | Missouri | 22 | 22 | 0 | $4.03B |
Important caveat: Small-state bias
Per-capita rates can be misleading for small states. Vermont's 7 flagged providers in a population of 647K is enough to top the rankings, while Georgia's 4 flags across 11M residents push it to the bottom. A single fraudulent provider in Wyoming would give it a rate of 0.17 per 100K. Higher detection may also reflect better state-level reporting and audit systems rather than more actual fraud. These rankings should be read as starting points for investigation, not conclusions.
Key Takeaways
- ▸Vermont, DC, and Maine have the highest fraud flag rates per capita, despite being among the smallest states in the dataset.
- ▸New York leads in total flags (114), driven heavily by its massive home care industry — 106 from statistical tests alone.
- ▸Arizona (0.96 per 100K) is notable as a large state with a high per-capita rate, fueled by rapid new-entrant clinics in Phoenix.
- ▸Spending per capita doesn't predict flags. Massachusetts spends $2,411/person but ranks below smaller states in flag density.
Source: HHS Medicaid Provider Spending Data (2018–2024) · 227M records