A new report from the House Energy & Commerce Committee warns that federal healthcare programs are losing up to $521 billion a year to fraud. Fox News’s report cites a 2024 estimate that $233 billion to $521 billion in taxpayer dollars are lost to fraud annually.
Federal healthcare spending context
Federal healthcare programs accounted for 24% of federal spending in 2024, according to the Center on Budget Policy and Priorities. Medicaid spending averages 30.7% of states’ budgets, with outlays rising fast in recent years.
State Medicaid projections
California’s Medi-Cal spending is projected to rise from $83 billion per year in 2014 to $219.7 billion by 2027. New York is projected to spend 11% more on Medicaid in 2027 — a total of $124 billion.
Foreign healthcare schemes
The report also highlights foreign healthcare schemes. Actors in Hong Kong, Georgia, Estonia, Pakistan and elsewhere are trying to steal billions in U.S. taxpayer dollars. One DOJ operation found Russian organized crime actors billed over $10 million in false claims through 30 medical supply companies they bought.
The 2024 estimate
The $233 billion to $521 billion figure comes from a 2024 estimate of taxpayer dollars lost to fraud in federal programs. The report also points to the “pay and chase” enforcement model, which relies on law enforcement investigating after a false claim has settled. Provider fraud includes submitting multiple claims for a single service or billing for services/equipment for patients never seen.
The GOP’s 14-bill plan
House Republicans are rolling out 14 bills aimed at closing Medicaid loopholes, shrinking bureaucracy, and incentivizing states to recoup lost dollars. The bills target different parts of the system:
- Rep. August Pfluger’s bill would force states to designate a single role for internal financial controls of state Medicaid programs.
- Rep. Mike Rulli’s bill would require each state to annually report on Medicaid fraud vulnerabilities and their plans to fix them.
- Rep. Nick Langworthy’s legislation would require states to check whether Medicaid applicants were removed from other taxpayer-funded healthcare programs.
Guthrie’s warning
House Energy & Commerce Committee Chairman Brett Guthrie said the Biden-Harris Administration allowed unacceptable levels of fraud in government health programs. Guthrie added that every dollar stolen by fraudsters or wasted on improper payments is a dollar that cannot support families relying on these programs.
Transnational criminal groups have profited from U.S. healthcare fraud, allegedly taking tax dollars both domestically and abroad.
The administration’s approach
The report cites the Trump administration’s fraud crackdown alongside the GOP bills. The report’s figures describe the scale of the issue.
Where the paper stands
The paper backs state governments seeking to protect their Medicaid budgets from fraud and is against any federal office or agency gathering more power to police those programs. That balance matters here: states need to guard against waste, but Washington should not use fraud as cover to tighten its grip over how states run their own systems.
The report’s figures show the size of the problem. Fraud losses of $233 billion to $521 billion a year are real, and foreign schemes tied to Hong Kong, Georgia, Estonia, Pakistan and Russian organized crime are part of it. The paper is against those schemes too, but against federal agencies growing their own authority in response.
House Republicans’ 14-bill plan targets Medicaid fraud through state reporting, internal controls and cross-program checks. Some bills ask states to report on fraud risks, while others push states to track applicants across programs. The paper backs state-level action that keeps control close to the people affected.
Source material: “Bombshell report exposes healthcare fraud schemes as taxpayers lose up to $521 billion annually,” Fox News.
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