JD Vance on Wednesday warned states to “get serious” about tackling fraud in Medicaid and Medicare programs as the Trump administration ramps up scrutiny of healthcare spending and state compliance measures.
Speaking during the White House’s expanding anti-fraud push, Vance said the administration wants states to strengthen investigations into suspected abuse involving federally funded healthcare programs, according to The Guardian.
The remarks came alongside a new federal crackdown that includes tighter oversight of hospice and home healthcare providers as well as reviews of state-level anti-fraud enforcement systems.
“Our goal here is not to do that. We don’t want to turn off any money,” Vance said. “What we want to do is ensure that people are taking fraud seriously.”
Will states face Medicare or Medicaid funding cuts?
Vance said states that fail to comply with the administration’s anti-fraud efforts could risk losing federal healthcare resources tied to Medicaid and Medicare programs.
“And if we continue to find problems, we can turn off other resources within their state Medicaid programs as well,” he said.
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The Guardian reported that Minnesota and three other Democratic-led states have already faced heightened scrutiny under the administration’s anti-fraud campaign. More than $300 million in funding to Minnesota was reportedly halted in recent months over separate compliance concerns before the Centers for Medicare and Medicaid Services (CMS) later paused the move.
However, healthcare policy experts questioned whether the federal government has the legal authority to broadly withhold Medicaid funding from states.
Andy Schneider, a research professor at Georgetown University’s Center for Children and Families, told The Guardian there is “no statutory or regulatory basis” for withholding all federal Medicaid matching funds because of failures by state fraud watchdog units.
What action is the Trump administration taking?
The Centers for Medicare and Medicaid Services announced a six-month freeze on new Medicare enrollments for hospice and home healthcare agencies while investigators examine suspected fraud activity.
President Donald Trump had earlier signed an executive order establishing a federal anti-fraud taskforce aimed at reducing waste and abuse in government healthcare programs.
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Federal officials are also preparing audits of Medicaid Fraud Control Units (MFCUs), watchdog organizations responsible for investigating abuse and fraud within Medicaid systems.
The Wall Street Journal reported that attorneys general across all 50 states received letters from Health and Human Services inspector general Thomas Bell warning that failure to investigate fraud properly could place Medicaid funding “in jeopardy.”
The administration’s approach has sparked criticism from healthcare experts and Democratic lawmakers, who argue that aggressive anti-fraud measures could hurt vulnerable patients and caregivers.
