Washington Is Finally Taking Medicaid Fraud More Seriously

BusinessPolicyWashington Is Finally Taking Medicaid Fraud More SeriouslyBySally Pipes,Contributor.Forbes contributors publish independent expert analyses and insights. Sally Pipes is a scholar and think tank CEO who writes on health care.Follow AuthorJun 01, 2026, 08:00am EDT“The administration is not merely prosecuting isolated bad actors,” says health expert Sally Pipes. “It is attempting to change the incentives that have long allowed weak oversight and improper payments to persist.”Getty ImagesVice President J.D. Vance recently intensified the Trump administration’s crackdown on healthcare fraud, warning states that they could risk losing federal Medicaid funding if they don’t adequately police abuse within the program.The Centers for Medicare and Medicaid Services has also announced a nationwide six-month freeze on new Medicare enrollments for hospice and home-health providers—sectors CMS Administrator Dr. Mehmet Oz described as plagued by “systemic and deeply troubling fraud.”The actions reflect growing concern inside the administration that weak oversight is allowing enormous sums of public healthcare spending to flow out the door improperly.These problems did not emerge overnight. Medicaid fraud, improper payments and oversight failures have been mounting for years. And while not every improper payment reflects criminal misconduct, the magnitude of questionable spending points to deep structural weaknesses in how the program is administered.According to the federal government’s own data, Medicaid improper payments totaled more than $540 billion between 2015 and 2024. The Paragon Health Institute estimates the true figure may exceed $1 trillion over the same period because federal auditors excluded eligibility verification from their reviews—meaning they frequently did not determine whether enrollees actually qualified for Medicaid.Medicaid now costs taxpayers roughly $900 billion a year and covers one in five Americans. Even a relatively modest error rate ca...