House Republicans have rolled out 14 bills aimed at healthcare fraud against Medicare and Medicaid, pushing states to do more of the investigative work themselves while keeping federal oversight intact. The package, unveiled through the House Energy and Commerce Committee, targets billions of dollars in fraud losses that federal health programs face each year.
The bills span audits, data analytics, and new state-level roles, with lawmakers arguing that state governments are best positioned to spot waste and abuse in their own Medicaid programs.
The HELP STATES Act: Letting States Keep a Share
The centerpiece of the package is the HELP STATES Act, sponsored by Rep. Thomas Kean (R-NJ). It would allow states to retain a portion of the federal clawback of Medicaid overpayments attributable to fraud, provided the retained funds are reinvested in Medicaid fraud prevention activities.
Currently, states must return recovered funds to the federal government even though they incur significant investigation and recovery costs. Kean told the Washington Examiner that the change would free up more resources for state agencies.
“This means more resources, stronger oversight, and a smarter system that rewards states for protecting taxpayer dollars,” Kean said.
The bill is designed to give states an incentive to pursue fraud cases aggressively. Under the new formula, states could retain a share of what they recover and reinvest it directly into prevention work.
Pfluger’s Medicaid Integrity and Fiscal Accountability Act
Rep. August Pfluger (R-TX) is pushing a separate bill that would require each state to designate an official responsible for claims processing, payments, and accounting matters within Medicaid programs. The move is aimed at improving transparency and accountability within state Medicaid offices.
Pfluger told the Washington Examiner that the step is straightforward.
“This is a commonsense step to protect Medicaid for the Americans it was meant to serve,” Pfluger said.
The bill does not create a new federal position or a national Medicaid watchdog. Instead, it puts the responsibility on state governments to assign a single official to oversee the financial operations of their Medicaid programs. That official would be responsible for managing claims, processing payments, and handling accounting records.
The idea is that having a dedicated point person in each state could help identify irregularities faster than a fragmented system where multiple offices handle pieces of the Medicaid budget. It also creates a clear chain of command for Medicaid finances, which could make audits and investigations easier to coordinate.
Rulli’s Medicaid Fraud Prevention Act
Rep. Michael Rulli (R-OH) has introduced the Medicaid Fraud Prevention Act, which mandates that states conduct comprehensive annual Medicaid fraud risk assessments, implement corrective action plans to address flagged vulnerabilities, and report regularly to Congress and the Department of Health and Human Services. The bill aims to put systematic pressure on state Medicaid programs to identify and address weaknesses before they become major problems.
Committee Chairman Rep. Brett Guthrie (R-KY) framed the package as a way to support state efforts while protecting the integrity of federal health programs.
“While states are on the front lines of confronting this fraud, we must take commonsense steps to ensure that they are able to recoup their costs and incentivize the vital work that is needed to ensure the program can continue to work for the Americans it was designed to serve,” Guthrie said.
Guthrie added that Republicans are leading the charge to restore the long-term vitality of federally funded health systems by encouraging enhanced data analytics to find and eliminate fraud and incentivizing states to target bad actors more diligently.
The regular reporting requirement is a key feature of the bill. By forcing states to report to Congress and HHS on a yearly basis, the federal government gets a running account of how each state is handling fraud risk. That could help the federal government identify states that are falling behind on their anti-fraud duties.
The Pay-and-Chase System Under Biden
The package was unveiled the same day the committee published a report on its investigation into increasing healthcare fraud patterns. The report’s findings are stark: the Biden administration reduced the Medicare and Medicaid oversight office to a handful of staff, and federal regulators under President Biden used a “pay and chase” system of paying out claims first and then trying to recover stolen funds only after the fact.
Under the pay-and-chase approach, insurers are paid upfront, and only later are attempts made to recover the money.
The report’s findings point to a systemic problem rather than isolated incidents. The reduction in staffing at the oversight office suggests that the federal government has scaled back enforcement.
Guthrie’s Response to the Report
Guthrie told the Washington Examiner that the scale of the problem under the Biden-Harris Administration is unacceptable.
“The amount of fraud that the Biden-Harris Administration allowed to go unchecked in government health programs is unacceptable,” Guthrie said.
The committee’s findings state the Biden administration reduced the Medicare and Medicaid oversight office to a handful of staff, and federal regulators under President Biden used a “pay and chase” system of paying claims first before recovering stolen funds. The report’s findings suggest that the federal government has not been aggressive enough in pursuing healthcare fraud.
The Bills at a Glance
- 14 bills unveiled through the House Energy and Commerce Committee
- Billions of dollars in fraud losses faced by federal health programs annually
- HELP STATES Act: Sponsored by Rep. Thomas Kean (R-NJ), allows states to retain a portion of recovered Medicaid funds
- Medicaid Integrity and Fiscal Accountability Act: Proposed by Rep. August Pfluger (R-TX), requires each state to designate an official for claims processing, payments, and accounting
- Medicaid Fraud Prevention Act: Proposed by Rep. Michael Rulli (R-OH), mandates annual risk assessments and regular reporting to Congress and HHS
- Biden administration: Reduced the Medicare and Medicaid oversight office to a handful of staff; used a “pay and chase” system of paying claims first before recovering stolen funds
- Committee chairman: Rep. Brett Guthrie (R-KY)
The package is a mix of carrot and stick. States get to keep a portion of the money they recover, but they also face regular reporting requirements and mandatory risk assessments. The federal government is essentially saying to states: states get more resources if they take on more responsibility.
Where the paper stands
The paper backs state auditors and investigators against both the federal agency and the big firms, and is against any rulebook the biggest firms helped write. Here, the bills ask states to do the federal government’s old job — auditing, assessing risk, and reporting back — while letting states keep some of what they recover from fraud. That is a fair trade, so long as it does not turn into a mandate that forces states to police their own Medicaid budgets under threat of losing federal funding.
The paper supports the carrot in this deal, but it watches the stick carefully.
The paper would want oversight narrow and aimed at the harm, not a broad new rulebook written with the biggest firms’ help. It would want the state-level officials these bills call for to be appointed without federal interference, not handed down from Washington. And it would want the regular reporting to stay voluntary, not turned into a requirement that punishes states for failing to catch every last dollar of fraud.
Source material: “Congress unveils slate of bills to combat healthcare fraud,” the Washington Examiner.
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