Subject: Addressing Medicaid Waste, Fraud, and Abuse
The focus of my administration is to eliminate waste, fraud, and abuse within government programs, especially those that serve individuals who rely on them the most.
The aim of the Medicaid program has always been to effectively manage taxpayer dollars directed towards healthcare providers who care for the most vulnerable Americans. Historically, reimbursement levels for such care have aligned closely with what providers receive from Medicare. Both state and federal governments have shared the financial responsibility to prevent lesser measures from being taken.
However, under the Biden administration, states and healthcare providers have found ways to exploit the system. For instance, they impose fees on healthcare providers, then return that same money to them as “Medicaid payments,” which triggers additional federal funding for the providers. This setup allows states to sidestep necessary financial contributions to Medicaid services. Consequently, states are incentivized to offer substantial refunds without accountability. Instead of aligning payments to Medicare rates, many states engaging in this practice pay healthcare providers nearly three times what Medicare would offer. This is, unfortunately, supported by the Biden administration.
These directed payments from states have surged rapidly, quadrupling in size over the last four years and reaching $110 billion in 2024 alone. This alarming trend jeopardizes the long-term stability of the Federal Treasury and Medicaid. Moreover, the imbalance in services for Medicaid and Medicare patients poses a risk to access to care for older individuals.
I am committed to safeguarding and enhancing these vital health programs for those who depend on them. Elderly Medicare and Medicaid beneficiaries deserve high-quality care in a system that minimizes fraud, waste, and abuse that ultimately endangers the integrity of the programs themselves. We value Medicare and Medicaid and are determined to ensure that they remain intact for those in need.
Therefore, the Secretary of Health and Human Services is instructed to take necessary actions to eradicate waste, fraud, and abuse in Medicaid, in accordance with applicable laws, including making certain that Medicaid payment rates do not exceed those of Medicare.
This memorandum does not aim to benefit any specific party or entity within the United States or its departments, agencies, or personnel, nor does it provide grounds for legal enforcement on any individual or entity.
Donald J. Trump
