Will AI Replace Whistleblowers? Why AI Can’t Detect Medicare Fraud Like Insiders Can

The new administration is leaning hard on a cabal of sophisticated programmers to detect waste, fraud, and abuse in government spending. And let’s be real—there’s no shortage of it.

With billions of dollars lost to Medicare fraud each year, AI sounds like the dream solution: that is while humans rest and dream machines just don’t need sleep, they don’t ask for whistleblower awards, and they don’t demand protection under the False Claims Act (FCA).

But before we hand over the keys to the compliance kingdom, let’s ask the real question:

What can AI actually detect—and what does it merely suspect?

AI Can Crunch Data, But It Can’t Divine Intent

Let’s say a Medicare provider suddenly starts billing ten times more than last year or is the biggest biller in a particular area. The AI flags it. Red alert. Fraud detected! Not so fast.

Maybe they expanded operations. Maybe they started offering a new, high-reimbursing service. Maybe they merged with another practice. And for biggest billers – someone has to be the biggest biller!

AI doesn’t know—it just guesses. It sees an anomaly, but it can’t distinguish between growth and graft, innovation and infraction, efficiency and embezzlement, biggest biller and biggest pillager.

Now, flip the script. Suppose a provider’s billing looks perfectly normal—no spikes, no anomalies, no deviations. But behind the scenes? They’re running a massive kickback scheme, handing out off-the-books incentives for Medicare referrals.

AI will miss that False Claims Act violation every single time.

Why?

Because AI doesn’t see what whistleblowers see. It doesn’t overhear whispered conversations about which vendors are getting paid off. It doesn’t pick up on emails that aren’t in the billing data. It can’t put together the pieces of a fake consulting contract masking an illegal slush fund.

And let’s not forget: fraudsters are smart. The moment AI starts flagging certain behaviors, they’ll tweak the playbook. It’s building the better mousetrap  – the mice as a species will always find some way to run away with the cheese, even if certain heads are stuck. But you know who will always be able to still see through it?

The insiders.

AI and the Great Kickback Blind Spot

Here’s the problem AI will never solve: Kickbacks don’t show up in the data.

Kickbacks are about influence—who gets what contract, who refers what patients, who steers government spending where. And they’re often disguised as fake consulting agreements, overinflated speaking fees, or cushy “advisory” positions.

None of that is in the claims data. And if it’s not in the data, AI won’t see it.

But whistleblowers will.

Let’s take it one step further.

FCPA: The Fraud AI Will Never Catch

Picture this: A U.S. medical device company wants to sell its products to state-run hospitals overseas. That means the doctors approving the purchases? Technically foreign officials.

Now suppose the company quietly bribes those officials—maybe through offshore accounts, maybe through an intermediary, maybe through gifts that don’t leave a paper trail.

What will AI detect?

Nothing.

There’s no billing fraud. There’s no irregular claim submission. There’s no obvious statistical anomaly.

But there’s a crime happening right under its nose.

AI can’t flag a wink-and-a-nod deal sealed over a round of golf. It can’t detect when a “consultant” in another country is actually a bagman for bribes.

AI Can’t Detect the Opioid Prescription Epidemic Like Whistleblowers Can

Take the opioid crisis—one of the most devastating fraud-fueled epidemics in history. AI might flag a doctor prescribing an unusually high number of opioids, but can it tell the difference between a legitimate pain management specialist and a pill mill operator? Hardly.

Fraudulent prescribers don’t always write excessive prescriptions—they manipulate patient records, forge diagnoses, and even bill under multiple provider IDs to evade detection. AI may detect a spike in oxycodone claims, but only an insider—a pharmacist, a clinic employee, or even a former sales rep—knows whether those prescriptions were medically necessary or fueled by kickbacks from drug manufacturers.

This is where whistleblowers come in. The compliance officer who saw the deal and refused to sign off. The sales rep who was ordered to sweeten the deal in a way that felt shady. The finance employee who saw a wire transfer that didn’t add up.

These people don’t just provide evidence—they provide the story that makes the case.

What AI Can and Can’t Do in Detecting Fraud Does that mean AI is useless? No. AI can be a powerful tool—but only when combined with real human intelligence.

What AI can do:

• Spot billing anomalies (outliers, spikes, deviations).
• Process massive data sets quickly (billions of claims in minutes).
• Help prioritize investigations (flagging statistically suspicious providers).

What AI can’t do:

• Prove intent (and intent is everything in fraud cases).
• Detect kickbacks (unless someone was dumb enough to put them in writing).
• Sniff out bribery, off-the-books payments, and influence schemes.
• Read minds, listen to hallway conversations, or find deleted emails.

News Flash: AI can detect half the story—but only an insider knows the whole truth.

And that’s where things get interesting.

AI Could Cut Down Whistleblower Awards—But Not Whistleblowers Themselves

As AI gets better at flagging fraud, expect the government to try arguing that whistleblower awards should shrink. If an AI system was already pointing at a suspicious provider, does the whistleblower really deserve a full 30% cut of the recovery?

They’ll say AI is doing the heavy lifting.

But here’s the truth: AI alone doesn’t win cases.

Without a whistleblower to fill in the gaps—connect the dots—provide the missing evidence, AI is just running numbers. It can hint at fraud, but it can’t prove it. And under the False Claims Act (FCA), you don’t get rewarded for spotting anomalies—you get rewarded for proving fraud.

So no, AI won’t replace whistleblowers.

AI Won’t Replace the Human Element

Fraud isn’t just about data—it’s about people. It’s about conspiracies, cover-ups, and intent.

AI can crunch numbers.
Whistleblowers connect the dots.

AI can highlight suspicious patterns.
Whistleblowers provide the smoking gun.

AI can flag statistical anomalies.
Whistleblower attorneys turn those anomalies into winning cases.

So will AI take over whistleblowers?

Not a chance.

If anything, AI will only make their role more essential than ever and more time sensitive than ever.

Fraudsters might be able to game the algorithms, but they can’t fool the employees working inside their operations. People know the truth. And as long as that’s the case, whistleblowers—and the best whistleblower attorneys—aren’t going anywhere, except to Court to vindicate the rights of the taxpayers and help their clients achieve record whistleblower awards.

If you have insider knowledge of Medicare fraud, kickback schemes, or False Claims Act violations, don’t let AI do half the job while you sleep—and miss out on the dream whistleblower award. Contact an experienced whistleblower lawyer today—because real cases need real people. There’s more to this world than just a machine, and no matter how fast AI computes, its intel doesn’t add up without a human telling the real story.