Loans, by Sasun Bughdaryan is licensed under Unsplash License
Medicare & Medicaid fraud has plagued the American taxpayer since its inception in 1965. In recent years investigators have been peeling back the curtain to find billions of dollars in fraud. Under the direction of Doctor Mehmet Oz, the Centers for Medicare & Medicaid Services have been putting in work to crack down on healthcare fraud, saving taxpayers $42 billion in just one year.
CMS reported an improper payment rate of 6.12% in fiscal year 2025, roughly $37 billion, an increase of $6 billion from the previous fiscal year, as measured by the Payment Error Rate Measurement (PERM). This is just the fraud we can find; the government reports cite $543 billion in improper Medicaid payments over the last decade, but the Paragon Health Institute found that it could be almost double at $1.1 trillion.
The CMS reports only provide a number to fraud, which comes in many forms. For example, as of July 9th, 2026, a woman in North Carolina was fraudulently billing the North Carolina Medicaid program for over $1.7 million in urine drug tests that were not performed. Also on July 9th, in New Jersey, six individuals, including a pharmacist and a doctor, made just over $20 million in taxpayer dollars in a Medicare and Medicaid kickback scheme. That is $20 million that could have gone towards hip replacements, vital medication, or hospital visits.
The scale of this fraud has not gone unnoticed by the American public. In a poll conducted by Deep Root Analytics for the State Financial Officers Foundation, they found that 87% of U.S. voters are very concerned by fraud or misuse of taxpayer money in government programs. The Trump administration took action and tasked Doctor Mehmet Oz and the CMS to crack down on healthcare fraud.
The CMS found that in the 2025 fiscal year, Medicare saved $42 billion from preventing fraud, waste, and abuse. This is an almost 60% increase compared to 2024 and the highest ever recorded in Medicare’s history.
The Centers for Medicare & Medicaid Services’ new approach has been paying off the most. Preventing first actions by fraudsters, which include revoking fraudulent providers before they could continue billing, stopping improper claims at the point of submission, and intercepting payments through payment controls before they ever cleared. This, what should be a common-sense strategy, has led to nearly 70% of the $42 billion in savings.
The Centers for Medicare & Medicaid Services updated their tactics after they recognized that many Medicare schemes are run by organized criminal organizations that exploit the slowness of the government. So they started to monitor the healthcare ecosystem and, in the words of Doctor Oz, conduct “controlled burns” to shut down the scam before they could become a network of fraud. An example of this happened in the home health and hospice sector, where their data signaled an abuse, and the CMS coordinated a national crackdown that suspended 808 providers.
Doctor Mehmet Oz and the CMS have built a system that is backed by data analytics rather than the old and much slower model, where the government pays and then tries to recover the loss after the damage has been done. The new approach has already had a great return on investment for the American taxpayer and should scare any fraudsters from attempting to steal tax dollars from the American people.
