Memorandum from the Secretary of the Ministry of Health and Human Services
Subject: Addressing Medicaid Waste, Fraud, and Abuse
My administration is deeply focused on eliminating waste, fraud, and abuse from government programs, especially to protect those who rely on them.
The Medicaid program was intended to be a safeguard for taxpayer dollars going to healthcare providers who assist the most vulnerable in our society. Historically, to keep payments reasonable, the billable costs for care have aligned closely with what providers can receive from Medicare. Both the state and federal governments have shared this financial load to ensure that subpar measures are not utilized.
However, under the Biden administration, states and healthcare providers have found ways to exploit the system. For instance, they “tax” healthcare providers and then return the same funds as “Medicaid payments,” which helps unlock additional federal matching funds for these providers. This manipulation allows states to sidestep their contributions to Medicaid services, leading to a situation where states feel less compelled to manage refunds wisely. Consequently, rather than adhering to Medicare fee structures, many states using these tactics are compensating providers at nearly three times the Medicare rate. This practice has been encouraged by the current administration.
Directed payments from these states have surged dramatically, even quadrupling over the last four years, hitting $110 billion in 2024 alone. This trend poses a risk to the long-term viability of both the Federal Treasury and Medicaid, creating an imbalance between Medicaid and Medicare that threatens access to care for elderly patients.
I’ve pledged to protect and enhance these vital government health programs for those who depend on them. Elderly recipients of Medicare and Medicaid deserve access to high-quality care, free from the fraud, waste, and abuse that endangers the integrity of the programs. We value these programs and are taking steps to ensure their preservation for those most in need.
Thus, the Secretary of Health and Human Services is directed to take necessary actions, within legal limits, to eliminate waste, fraud, and abuse in Medicaid, ensuring that payment rates do not exceed those of Medicare.
This memorandum does not aim to confer substantial or procedural benefits to any party within the United States or its departments, agencies, or entities, including their officers, employees, or agents.
