White House Task Force Tackles Health Care Fraud
Earlier this year, Vice President J.D. Vance and Federal Trade Commission Chairman Andrew Ferguson announced the formation of the White House Task Force on Fraud, pledging to protect taxpayer money from fraudsters. Their work is off to a solid start, having already frozen billions in questionable payments and taken action against businesses that billed Medicare for non-existent patients. They’ve notified all 50 states in the process.
However, a particularly audacious scam persists in the American healthcare system. The 340B drug discount program was designed to help low-income patients but has become, in many instances, a way for large “not-for-profit” hospitals to fund advertising and inflate executive salaries while pushing out independent competitors.
One concerning aspect that hasn’t received much attention is that numerous hospitals participating in the 340B program have been implicated in Medicare and Medicaid fraud by the Department of Justice. This trend merits further investigation by Vance and Ferguson.
A look at recent settlements from the Justice Department shows that 340B hospitals have paid millions—sometimes even hundreds of millions—over fraud allegations. In particularly egregious cases, the total settlements surpass $500 million. Allegations range from kickbacks to billing for services that weren’t actually provided, to manipulating Medicaid matching funds.
For example, Christus St. Vincent in Santa Fe paid $12.24 million in 2017 after being found guilty of manipulating contributions to inflate federal matching funds. Additionally, they also faced a separate settlement related to billing for services never performed.
Bon Secours St. Francis Health System paid $36.5 million to settle accusations regarding kickbacks tied to physician referral volumes. I mean, it’s pretty startling when you learn that the system has been extracting profits from low-income neighborhoods while misdirecting resources.
Community Health Network in Indianapolis agreed to pay $345 million to resolve False Claims Act allegations tied to overpayment practices designed to manipulate Medicare referrals. They were accused of raising physician fees above fair market value to generate more referrals.
These troubling cases don’t represent all 340B hospitals; many are following the program’s original intent. Still, it’s concerning how common these fraudulent practices appear among large systems that benefit from the program while defrauding federal initiatives meant to support healthcare.
The 340B program lacks a system to differentiate between ethical and unethical providers. Hospital eligibility isn’t automatically reassessed in cases of fraudulent settlements, leading to a disconnect among the Department of Justice, Centers for Medicare and Medicaid Services (CMS), and the Health Resources and Services Administration (HRSA). This means hospitals can defraud Medicare and Medicaid, paying vast sums in settlements while continuing to enjoy their substantial $340 billion in benefits. Addressing these coordination challenges is precisely what the White House Task Force on Fraud aims to tackle.
Under the Trump administration, progress has been made. HRSA launched a pilot program in July 2025 that requires hospitals to submit data on their use of 340B drugs before receiving reimbursement. This introduces a necessary layer of accountability. Not surprisingly, hospital lobby groups have resisted these changes and even filed lawsuits, leading to federal court actions to halt the process.
The foundation of the 340B program is straightforward: it provides hospitals with an economic edge to assist patients who have limited options. For many, this assistance is invaluable. However, for some entities, it has turned into an unmonitored financial advantage, without any means to weed out those with prior records of wrongdoing.
As Vance and Ferguson intensify their focus on fraud throughout the healthcare sector, hospitals with histories of unethical conduct will undoubtedly remain under scrutiny.
