The House Energy and Commerce Committee Is Sounding the Alarm on Medicaid Fraud

Medicaid was sold to the American people as a program meant to serve pregnant women, the disabled, the elderly, and children. Unfortunately, the program is now riddled with fraud committed by organized crime syndicates, identity thieves, and fraudulent shell businesses. The House Energy and Commerce (E&C) Committee, led by Chairman Brett Guthrie (R-Ky.), is highlighting these fundamental vulnerabilities. ATR applauds these members for taking these problems seriously.

The scale of Medicaid fraud is staggering. The Centers for Medicare & Medicaid Services (CMS) reported a Medicaid improper payment rate of 6.12 percent in fiscal year 2025 – roughly $37 billion, up from $31 billion in 2024. This number, representing just one year of fraud, dwarfs the suspected $9 billion stolen in Minnesota over several years. And that story rightly dominated the news cycle for weeks.

Of course, this is just the fraud we can identify. Inevitably, there is plenty more that still lies in the shadows. While government reports cite $543 billion in improper Medicaid payments over the past decade, the Paragon Health Institute notes that it could be nearly double that ($1.1 trillion) given that the Obama and Biden administrations excluded eligibility checks from their audits.

This rampant fraud takes many forms: personal care attendants billing for patients they never visited, medical transportation companies charging for rides that never happened, stolen Social Security numbers used to submit claims, adult day care centers collecting reimbursements for patients they never cared for, criminal organizations enrolling elderly individuals in care services and then billing Medicaid as their caretaker, and far more.

The E&C Committee highlighted a few specific, egregious cases of this fraud:

• In New York, two Brooklyn fraudsters ran a seven-year adult day care and home health scheme, walking away with $68 million in Medicaid dollars before pleading guilty.
• Also in New York, two men who owned adult day care centers and a pharmacy were hit with charges for an alleged $120 million in Medicaid and Medicare fraud schemes.
• In Massachusetts, a woman pleaded guilty to billing MassHealth for $500,000 in Personal Care Attendant, home health, and adult foster care services after enrolling various disabled, elderly, and homeless people in services without their knowledge. She claimed to be their caretaker, despite never having provided these services.
• In Colorado, two separate individuals were charged for running bogus non-emergency medical transportation schemes against Health First Colorado:
  • One allegedly billed over $1 million in fake rides – $400,000 of which were for herself and family members.
  • The other billed $3.3 million in phantom rides, including 64 trips for a single beneficiary totaling $283,000, $165,000 of which were billed after that beneficiary was already dead.
• In Oregon, a woman is now sitting in federal prison after using stolen identities to manufacture $3 million in fake Medicaid claims, triggering $1.5 million in fraudulent reimbursements before she was caught.

These revelations are just a glimpse into much larger problem, making the need for oversight obvious.

Thankfully, while the Left has downplayed (and often enabled) the problem, the House Energy and Commerce Committee has not looked the other way. In March, Chairman Guthrie, along with Subcommittee Chairmen John Joyce (R-Penn.) and Morgan Griffith (R-Va.), sent letters to ten states (California, Colorado, Massachusetts, Maine, Nebraska, New York, Oregon, Pennsylvania, Vermont, and Washington) demanding information on what each state is doing to strengthen Medicaid program integrity. This followed an earlier investigation into Minnesota and a February hearing titled “Common Schemes, Real Harm: Examining Fraud in Medicare and Medicaid,” where expert witnesses laid out the breadth and depth of the problem. In March, the Subcommittee held a second hearing examining the role of CMS in detecting fraud sooner and improving coordination with state law enforcement.

This is exactly what congressional oversight is supposed to look like.

This inconceivable level of Medicaid fraud is a slap in the face to the people the program was built to serve. When fraudsters set up fake businesses, bill for services never rendered, or exploit disabled and elderly patients as billing vehicles, they are robbing our most vulnerable Americans. Every dollar diverted to a fraudulent claim is a dollar that doesn’t reach those in actual need.

Medicaid recipients are already competing for care, especially in areas without many healthcare providers. FGA reports that over 700,000 “individuals with developmental or intellectual disabilities or other conditions that require special care are languishing on Medicaid waiting lists.” Thousands of vulnerable recipients will not receive care because resources have been diverted away to those who do not need it.

Now that we have identified the problem, we must take action to address it. ATR encourages lawmakers to crack down on this fraud in upcoming legislation. Specifically, through codifying and expanding pre-payment fraud detection requirements and mandating tighter provider enrollment screening for high-risk provider categories. On the administrative side, CMS should expand their abilities to detect fraud before payments are made, not years later after the money is long gone – this responsibility also falls (primarily) on individual state Medicaid programs.

While the Left will inevitably frame Medicaid oversight as a “life or death” attack, the people who are stealing from it are the ones actually eroding the program.

The E&C Committee has made it clear that the era of looking the other way is over. With the right pressure, the right oversight, and states stepping up to the plate, Medicaid can be restored to its named purpose: a narrowly tailored program for America’s most vulnerable.