Under the Biden administration, the U.S. Centers for Medicare & Medicaid Services slashed its capacity to prevent fraud at the same time that program utilization and spending increased, according to the findings of a congressional report shared with the Washington Examiner.
The 87-page report, released Tuesday by Republicans on the House Energy and Commerce Committee, examined fraud trends over the past several years in the Medicare and Medicaid programs.
Committee members found that former Health and Human Services Secretary Xavier Becerra reduced the number of Medicare and Medicaid program integrity personnel from 80 to six between January 2021 and January 2025.
According to the report, the Biden administration fired all but six workers in the program integrity office, which is supposed to oversee the flow of Medicare and Medicaid dollars to all 50 states and qualifying U.S. territories.
The committee concluded that, as a result of the staffing cuts, CMS was not equipped to combat healthcare fraud because it was not operating at full capacity.
At an April 21 hearing, HHS Secretary Robert F. Kennedy Jr. informed the committee that the Biden administration “opened the door to fraud, waste, and abuse.”
Kennedy described a Biden-era billing system of “pay and chase,” a reactive payment model in which CMS regulators paid claimants first and tried to recover fraudulent funds later.
“They implemented a new program called ‘pay and chase’ where we have to pay people — we have ended this — we pay claims that we know to be fraudulent — and that is what they did during the Biden administration,” Kennedy testified. “And then they go and try to claw back that money, which never happens.”
Kennedy also said that Biden administration officials instructed staff in his department to not focus on program integrity, only the enrollment process.
“There was no pre-validation to them signing up,” Kennedy said. “So they were just inviting people onto the rolls.”
GOP leaders on the committee cited the agency’s reduced fraud-fighting capabilities as one of the reasons for the rise in Medicare and Medicaid fraud.
Medicaid spending increased while former President Joe Biden was in office, and today it constitutes the largest category of total state expenditures, accounting for an average of 30.7% of state budgets. In 2024, national Medicaid spending increased by 6.6% while per-enrollee expenditure costs jumped 16.6%, even as enrollment declined by 8.6% post-pandemic.
Certain states are seeing spikes in Medicaid spending. California, for example, is expected to increase its annual Medi-Cal spending from $83 billion in fiscal 2014 to $219.7 billion in 2027, almost tripling program costs within a 13-year period. New York, meanwhile, is projected to spend 11% more on Medicaid from all government funding sources in 2027.
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Medicaid spending also increased for specific services flagged by federal authorities as being at higher risk for fraud. From 2021 to 2025, Medicaid spending on child autism treatment services, billed as Applied Behavior Analysis, grew six times faster than the number of children receiving the service.
Last year, Minnesota had the highest per-beneficiary monthly payments for ABA services, spending $7,673 per beneficiary. Criminal investigations have uncovered widespread kickback schemes, dozens of fraudulent providers, and frequent billing inconsistencies within the state’s Early Intensive and Developmental Behavioral Intervention program, which administers Medicaid ABA services.
Rep. Brett Guthrie (R-KY), chairman of the House Committee on Energy and Commerce, said that every dollar stolen from Medicare and Medicaid is “a dollar taken from the seniors, children, pregnant women, and Americans with disabilities these programs were created to serve.”
“That’s why Chairman Joyce and our Committee have made rooting out fraud a top priority. Our findings expose the worst actors, but the accompanying recommendations also lay out commonsense steps to help CMS and the states stop fraud before it happens,” Guthrie told the Washington Examiner. “We will keep fighting to hold criminals accountable, protect patients, and safeguard taxpayer dollars.”
Rep. John Joyce (R-PA), chairman of the Oversight and Investigations Subcommittee, said they are focused on rooting out fraud that threatens the future of Medicare and Medicaid.
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“These crimes hurt patients and steal from the American taxpayer. We will continue to expose those who exploit the system, hold fraudsters accountable, and advance commonsense recommendations that states can implement,” Joyce added. “This cannot be solved alone. Protecting the integrity of these programs must be a shared goal, because millions of Americans are counting on us to get it right.”
To date, the committee has held three oversight hearings on Medicare and Medicaid fraud, sent 12 letters to program integrity officials across the country, and reviewed more than 100,000 pages of investigative documents turned over to the committee.
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[ H/T Washington Examiner ]
