Flanked by Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz, right, Vice President JD Vance speaks to the media from the Eisenhower Executive Office Building on the White House campus, Wednesday, May 13, 2026, in Washington. (AP Photo/Jacquelyn Martin)
Medicaid has been plagued with fraud for decades. But recent revelations indicate that the fraud isn’t just widespread — it is rampant.
Fortunately, there is a way to stop the fraud, and it is one that Republicans have been proposing for decades.
Politicians and health care bureaucrats at the federal, state and local levels have long known there’s a problem. The New York Times ran a revealing series of articles 20 years ago exposing Medicaid fraud. Here are some of its findings:
- Dr. Dolly Rosen, a dentist operating out of a Brooklyn storefront, “claimed to have performed as many as 991 procedures a day in 2003.” She simply “invented” the services she claimed to have provided.
- “One [nursing home] operator took in $1.5 million in salary and profit in the same year he was fined for neglecting the home’s residents.”
- “[C]riminal rings … duped the program into paying for an expensive muscle-building drug intended for AIDS patients that was then diverted to bodybuilders.” One doctor prescribed $11.5 million worth of the drug.
- Sheryl Carswell added 4,434 special education students to the Medicaid rolls in a single day “by recommending that they receive speech therapy” en masse. She had examined only a handful of them to see if they actually needed the therapy.
The Minnesota and California Medicaid fraud rings may be some the most egregious recent examples, but Department of Justice investigations — led by Center for Medicare and Medicaid Services Administrator Dr. Mehmet Oz and Vice President JD Vance — are only just getting started. Oz says federal officials have recently suspended some 800 California hospice providers, mostly in the Los Angeles area, because of suspected fraud. Tellingly, very few of them have reached out to protest.
Here’s the problem. The Medicaid program has grown exponentially since its inception in 1965. Medicaid is the primary health coverage for 75 million people. It provides basic health and dental coverage for low-income adults and children, including paying for 41 percent of all U.S. births. It covers some people with disabilities, provides long-term care services (i.e., nursing homes) for poor seniors, and can cover the out-of-pocket costs for low-income seniors on Medicare.
Medicaid is a joint federal and state program. The federal government provides each state with money — referred to as the “federal match” — depending on several factors. States must include certain benefits, but they can provide additional coverage.
The federal match ranges from 50 percent for many states up to 76.9 percent for Mississippi. In other words, when Mississippi spends a dollar on Medicaid, the federal government pays 76.9 cents. The federal match creates an economic disincentive for states to stop fraud, because the federal government pays most of the cost.
That is why the best way to address the fraud problem is to return to a reform long proposed by Republicans: Medicaid block-grants. A set block-grant to each state would limit states’ ability to game the reimbursement system and remove incentives to look the other way at fraud. Closer monitoring of Medicaid rolls could also help limit phantom enrollees and ensure only qualified people are enrolled.
Newly imposed work requirements are intended to limit eligibility to those who really need Medicaid. This is why the fraudsters are increasingly focusing on medical conditions, such as autism and hospice care, where work requirements don’t apply.
Under the current system, states pass most of those costs on to federal taxpayers and then accuse anyone who questions the spending of being hardhearted or racist. That’s what Minnesota officials did. Now, federal officials and investigative journalists are discovering that hundreds of those California hospices are just empty rooms rented in empty office buildings.
Health care fraud exists because of the vast amounts of government money available, the complex systems that make cheating easy to hide and progressive politicians happy to shovel money out the door. It also doesn’t help that many bureaucrats think the solution to any problem is to spend more, and that administrators and the media fail to do due diligence policing the system.
Read the original post on TheHill.com.