GOP pushes fraud crackdown to save money on Medicaid

As a practicing urologist, Rep. Greg Murphy, R–N.C., has seen firsthand the opportunities for dishonest providers to commit Medicaid fraud.

“There are absolutely some people who defraud the Medicaid system. They should be rooted out. Heavy fines. Heavy prison penalties,” Murphy told WORLD. He and other Republicans also hope to achieve heavy savings by cracking down on Medicaid fraud. They contend there are billions of dollars being misspent on the government insurance program for the poor. With a legislative agenda that calls for $200 billion per year in budget cuts, the GOP needs to save every penny it can.

But most of the Medicaid fraud that’s caught today is committed by providers, not patients. Andy Schneider, research professor for the Practice Center for Children and Families, said that shouldn’t come as a surprise.

“It’s a health insurance program, right? Not a cash assistance program,” Schneider said. “The people who get money in the program are the care organizations and the providers.”

One such provider, Elia Torres, was convicted in October 2024 in Maryland of defrauding Medicaid for $1 million. For five years, her company, Diversity Talks LLC, billed the government for speech-language therapy services that were never delivered to as many as 40 children. The most high-dollar cases of Medicaid fraud follow similar patterns.

New York’s attorney general secured a 25-year sentence for Imram Shams, a fraudster convicted in February of charging Medicaid $7 million for testing services. Donald Brooker of North Carolina received 16 years behind bars in 2023 for charging Medicaid with $11 million dollars’ worth of urine sample testing—none of which were actually needed.

In 2024, the Department of Health and Human Services investigated a total of 13,000 cases of fraud nationwide, resulting in $1.3 billion in recovered funds and 817 convictions. Each state has its own Medicaid fraud control unit. Ohio had the most convictions of any state with 129, while states like Alabama, Rhode Island, North Carolina, Illinois, and Missouri had none.

Some providers that partner with Medicaid are large and established, like Walgreens and other pharmaceutical companies. Others are smaller operations—like Congressman Murphy’s.

“You say, ‘I’m going to accept Medicaid patients,’ you sign something with the state, you accept Medicaid cards,” Murphy told WORLD. “I still see patients, and a large number of them are still on Medicaid.”

While individual states have the last say in the partners Medicaid selects, the Affordable Care Act set some federal screening standards in 2010. Before providers can bill Medicaid, the government checks their Social Security numbers, licensure, and criminal background. Potential Medicaid providers are considered high risk if they are new enrollees with the Department of Health and Human Services or have a suspension on their record due to fraud within the last 10 years or other reasons in the last six months.

Schneider, the research professor, believes these parameters have led to improvements in fraud rates.

“We’re a lot better off now,” he said. “Is there still work to be done? Sure. There’s still a lot of cases being prosecuted so obviously we’re not keeping all the bad actors out. But it’s a much better situation than it was 15 years ago.”

When asked about the role providers play and what Congress can do about them, Murphy said he believes increased penalties could help deter fraud. Rep. Raul Ruiz, D-Calif., also believes there are some loopholes Congress can close. Ruiz worked as an emergency room doctor and then started a healthcare collaborative group.

“When working in the emergency department, I see a patient, there’s charting, we dictate what we did for the patient, and then the hospital bills the insurance company. So, there’s multiple layers” of accountability, Ruiz said. But at smaller providers there are fewer checks.

“We can look at billing,” Ruiz told WORLD. “Are people doing what they said they did? It’s difficult if you’re not in the practice. How can you tell if this patient needed this service or not if you weren’t there to see the patient? It’s hard.”

Ruiz mentioned that random auditing for service providers might be one way of increasing accountability.

In its most recent spending legislation, Congress approved a $26 million hike to the Health Care Fraud and Abuse Control Account—the federal funding dedicated to Medicaid abuse detection in states. It’s not a large step, but it may be the first investment Congress makes in shoring up scrutiny of fraud by providers. The increase now brings the account’s funding to $941 million.

While Medicaid providers commit substantially more documented fraud than beneficiaries, Republicans stress there’s an unknown amount of waste on the patient side.

“I can give you stories—I’ve seen patients,” said Murphy, the lawmaker with his own medical practice. “I saw two in one day six or eight weeks ago; there’s no reason why they should be on Medicaid. These two individuals were gaming the system. And they were allowed to game the system because the state did not audit its rolls—or we have people giving out Medicaid benefits to individuals who do not qualify.”

Schneider pointed out that needless spending is not the same as deliberate fraud, but it costs taxpayers all the same, and no one knows for sure how much money is wasted. He doesn’t think there’s a readily available way of evaluating the problem.

“I wish I could answer it,” Schneider said. “I don’t know how large it is.”