What Happened?

About 85 million people relied on Medicaid in fiscal 2024, at an estimated cost of $949 billion. A new report from the Congressional Research Service (CRS) draws a clear line between fraud and improper payments, and the Centers for Medicare & Medicaid Services estimated that 77 percent of improper payments in fiscal 2025 came down to missing paperwork, not intentional fraud or abuse. ​

Why Does it Matter to Me?

CMS says its efforts to catch errors and fraud in Medicaid and the Children's Health Insurance Program (CHIP), a health program for kids, saved the federal government $1.5 billion in fiscal 2024. Part of CMS's "Crushing Fraud, Waste, & Abuse" effort is a Medicaid Fraud War Room, which CMS says stopped more than $203 million in potentially improper payments in its first 88 days. States must check providers before letting them enroll, and they hire outside firms to recover overpayments.

Both Sides, Now

Where states use managed care plans, they also must independently audit the plans' financial records and the records of each patient visit. State fraud units (MFCUs) recovered $2 billion from criminal and civil cases in fiscal 2025, a sign that fraud is still an oversight concern.

The Department of Health and Human Services' Office of Inspector General (HHS OIG), a federal watchdog, reported in August 2025 that some Medicaid managed-care plans made few or no referrals of possible provider fraud. A separate HHS OIG report from December 2025 found that state Medicaid agencies had improperly made about $289 million in fixed monthly payments for enrollees who had died, including a $202 million federal share.

The Government Accountability Office (GAO), Congress's watchdog, put "Strengthening Medicaid Program Integrity" on its High Risk List in February 2025. That difference between fraud and missing paperwork matters for how Congress and the Trump administration approach oversight.

What Happens Next?

Several agencies share the job of watching over Medicaid: CMS runs the Medicaid Integrity Program, HHS OIG audits the program and oversees the state fraud units, and the Justice Department investigates and prosecutes fraud cases. HHS OIG's annual report for fiscal 2025 counted 1,185 convictions, 856 of them for fraud, along with the $2 billion in recoveries.

No vote or hearing on Medicaid program integrity is currently scheduled. The big open question is whether Congress will act on the GAO's High Risk listing or on the CRS finding that the true scale of fraud has not been measured.

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AllCiv makes it easy to stay politically informed and involved.

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