Medicaid Fraud Concerns Highlighted by New Developments

There’s been a lot of talk about Medicaid fraud lately. Six months ago, Minnesota made headlines for supposedly losing around $9 billion to fraudulent activities since 2018. Now, reports suggest that health care providers could be filing fraudulent claims that add up to approximately $100 billion annually. Interestingly, the Trump administration is making moves to tackle some of these loopholes that have led to such substantial losses of taxpayer money.

On April 21, Dr. Mehmet Oz, who heads the Centers for Medicare and Medicaid Services, announced that states must create more robust plans to reassess their Medicaid providers. Given that millions of these providers exist nationwide, states have a legal obligation to recertify their enrollment at least once every five years.

This recertification process is critical; it involves verifying the licenses of health care providers and ensuring they comply with state and federal laws. The aim is to curb fraudulent activities that ultimately affect taxpayers.

However, many states seem to be falling short on this important task. My organization submitted Freedom of Information Act requests to 48 states and Washington, D.C. regarding the re-verification of Medicaid providers. Remarkably, about two-thirds of the states didn’t respond, and others provided only partial or unclear data. Among those that did respond, the findings are quite concerning.

For example, in Georgia, there are records for 374,774 Medicaid providers, but about 21,000 haven’t been reviewed in over five years. Illinois has an even more troubling situation, where over 25% of the 222,000 Medicaid providers haven’t justified their continued participation in the program for more than five years. It raises questions about how many of these providers might be defrauding the system.

Without stringent enforcement, it seems likely that fraud will only escalate. Re-verification involves checking licenses, cross-referencing against death records, and ensuring providers haven’t been excluded from Medicaid. The Trump administration has ramped up efforts, leading to the suspension of numerous hospice providers due to fraudulent claims, such as those found in Los Angeles.

Reverification can also reveal providers who may be barred from practicing in one state but still billing Medicaid in another. Our research uncovered health care providers in Minneapolis that were excluded in Minnesota but not flagged at the federal level.

One example is an adult day care operator whose license was revoked due to multiple violations regarding patient interaction. Additionally, a report indicated that 12% of providers dismissed for cause in one state were soon found operating in another state’s Medicaid program.

It’s not uncommon for providers to misuse someone else’s identity, as seen in California, where scammers made millions by falsely claiming to provide hospice care using the identities of deceased doctors.

Dr. Oz has given states a deadline of 30 days to plan how they will enhance their required reviews of Medicaid providers. This urgency is warranted; in the early 2010s, over 1.6 million providers were reactivated in the Medicare program, leading to the revocation of more than half a million statuses and saving taxpayers around $2.4 billion. Imagine what it could look like if just 5% of inappropriate Medicaid payments could be prevented—it could mean billions saved each year.

How states will respond to these calls for reform remains uncertain. Even if they take revalidation seriously, a five-year interval for review seems too lenient; during that time, bad actors can easily exploit the system. More frequent reviews might be a better approach, and the Trump administration could consider regulations or new legislative measures to enforce this.

In the meantime, it’s crucial for states to step up and follow the lead set by Dr. Oz. Serious plans must be established to confirm that all Medicaid providers meet the necessary qualifications. With so much taxpayer money already lost to inaction, the call for immediate reforms is indeed appropriate to confront the growing Medicaid fraud crisis.