WASHINGTON, DC – October 7, 2026 (STL.News) America – Medicare – Federal investigators are catching health care fraudsters, recovering billions of dollars, removing questionable providers from federal programs, and increasingly using sophisticated data analytics to identify suspicious medical billing.
Those efforts deserve recognition.
But their success raises a larger question: How much improper or fraudulent Medicare and Medicaid billing remains undiscovered?
There is no reliable number.
That uncertainty—not an assumption that every billing error represents fraud—is precisely why the United States should consider dramatically expanding independent auditing of Medicare and Medicaid claims.
In fiscal 2025, the Centers for Medicare & Medicaid Services reported estimated improper payments of $28.83 billion in Medicare fee-for-service, $23.67 billion in Medicare Advantage, $4.23 billion in Medicare Part D, and $37.39 billion in Medicaid.
Together, those estimates total approximately $94.1 billion.
That is an enormous amount of money requiring attention.
It is also essential to understand what the number means.
CMS explicitly warns that an improper payment is not necessarily fraud.
Improper payments can result from missing documentation, administrative mistakes, incorrect payment amounts, eligibility problems and other failures to comply with program requirements. Some improper payments are underpayments rather than money improperly paid by the government.
CMS reported that insufficient documentation accounted for 77.17% of Medicaid improper payments measured for fiscal 2025 and cautioned that such documentation problems generally do not indicate fraud or abuse.
So it would be incorrect to claim that America suffered $94.1 billion in Medicare and Medicaid fraud based on those figures.
But those numbers support a different question:
Should taxpayers demand much more verification of the medical bills the federal government is paying?
Federal health care fraud enforcement is working
Substantial evidence shows that federal health care fraud enforcement produces results.
The Justice Department’s 2026 National Health Care Fraud Takedown resulted in charges against 455 defendants, including 90 doctors and other licensed medical professionals, in alleged schemes involving more than $6.5 billion in false claims.
At the same time, CMS suspended 1,079 providers and revoked the billing privileges of another 1,403 providers.
Federal authorities also reported seizing more than $182 million in cash, luxury vehicles, jewelry, and other assets.
Those are significant enforcement results.
State Medicaid Fraud Control Units are also producing substantial recoveries.
The Department of Health and Human Services Office of Inspector General reported that Medicaid Fraud Control Units recovered almost $2 billion during fiscal 2025, including approximately $1.3 billion from criminal cases and $706 million from civil cases.
The units reported 1,185 convictions, including 856 involving fraud.
HHS-OIG calculated that the units recovered $4.64 for every dollar state and federal governments spent to operate them.
That is not evidence that enforcement is failing.
It shows enforcement can work.
The question is whether the country should do considerably more of it. This may be only the surface of what they would find.
Technology is already stopping questionable payments
CMS has also demonstrated what can happen when investigators combine claims data, analytics, and rapid intervention.
In July 2026, CMS announced that its Medicaid Fraud War Room had stopped more than $203 million in potentially improper Medicaid payments during its first 88 days.
CMS said federal and state officials used advanced analytics and coordinated enforcement to identify 50 high-risk providers.
In another 2026 initiative, CMS reported preventing more than $1.6 billion in potentially improper Medicare laboratory payments through enforcement actions supported by artificial intelligence, machine learning and other advanced analytics.
Those accomplishments point toward an important policy question.
If technology can identify hundreds of millions or billions of dollars in questionable billing in targeted areas, how much additional improper billing could be identified by applying similarly aggressive analysis across more of the Medicare and Medicaid systems?
We do not know.
That is precisely the point.
Audits reveal problems that otherwise might remain hidden
Government audits show why additional scrutiny matters.
In one report released by HHS-OIG in 2025, auditors examined Medicare payments involving 15 optometrists who billed unusually high-level evaluation and management services for beneficiaries at nursing facilities.
Auditors reviewed a sample involving 225 Medicare enrollees and 399 service lines.
According to HHS-OIG, none of the 399 sampled service lines complied with Medicare requirements.
OIG estimated that Medicare improperly paid the selected optometrists at least $3 million.
The audit did not establish that every improper payment represented criminal fraud. That distinction remains important.
But HHS-OIG reported another significant finding: CMS had not conducted claim reviews of the selected optometrists’ billing and lacked system edits that would have prevented those particular claims.
That illustrates a fundamental principle of financial oversight:
Problems are difficult to discover when transactions are not examined.
Medicaid managed care presents another challenge
The Government Accountability Office has identified additional limitations involving Medicaid managed care.
More than three-quarters of Medicaid beneficiaries receive coverage through managed-care arrangements.
Yet GAO reported in 2025 that CMS’s Medicaid managed-care improper-payment estimate did not include payments managed-care plans made directly to medical providers.
GAO specifically identified risks involving payments for services that were never delivered or that lacked necessary documentation.
CMS conducts additional audits outside that measurement.
According to GAO, between October 2021 and February 2025, CMS completed 899 audits of managed-care providers and opened 155 audits of managed-care plans.
Those audits identified more than $33 million in overpayments.
Again, that does not prove widespread criminal fraud.
It demonstrates why continued auditing matters.
Nobody knows the true amount of undetected fraud
One of the most important facts in this debate is also one of the least satisfying:
Nobody knows exactly how much Medicare and Medicaid fraud goes undetected.
By definition, successful undetected fraud does not appear in prosecution statistics.
CMS also explicitly states that its improper-payment measurements are not measurements of fraud.
The Government Accountability Office has attempted to estimate fraud losses across the entire federal government.
Using data covering fiscal years 2018 through 2022, GAO estimated that the federal government loses between $233 billion and $521 billion annually to fraud.
But that is a government-wide estimate.
GAO specifically warns against applying that percentage or range to individual federal programs.
Therefore, it would be incorrect to take GAO’s estimate and claim that a corresponding percentage of Medicare or Medicaid spending is fraudulent.
We simply do not have reliable evidence establishing such a figure.
That uncertainty should not be used to claim that fraud is rampant everywhere.
But neither should uncertainty become an argument against looking harder.
Create an independent payment-integrity authority
Congress should consider establishing a permanent Federal Health Care Payment Integrity Authority dedicated specifically to auditing Medicare and Medicaid payments.
The concept would resemble the aggressive efficiency and spending-review approach associated with DOGE, but the proposed organization should be permanent, professional, nonpartisan, and narrowly focused on health care payment integrity.
Its mission would not be to assume doctors, hospitals, or other providers are dishonest.
Its mission would be straightforward:
Verify that taxpayers are paying for legitimate services that were actually provided, properly documented, and correctly billed.
The authority should complement—not replace—CMS, HHS-OIG, the Justice Department, state Medicaid Fraud Control Units and existing program-integrity contractors.
Its principal responsibility should be auditing.
Every category of provider receiving Medicare or Medicaid money should potentially be subject to examination.
That includes physicians, hospitals, laboratories, pharmacies, nursing facilities, home-health agencies, durable-medical-equipment suppliers, managed-care organizations and other providers and contractors.
The same principle should apply to everyone:
Professional status, institutional reputation and organization size should not determine the level of financial accountability.
Analyze claims before the money disappears
The federal government already possesses enormous quantities of health care claims data.
CMS operates a Fraud Prevention System that uses predictive analytics to identify potentially suspicious claims and providers.
According to CMS, that system monitors approximately 4.5 million Medicare claims every day.
CMS also uses technologies including predictive modeling, behavioral analysis, network analysis, and machine learning to identify fraud, waste, and abuse risks.
Those capabilities should be expanded.
A national payment-integrity system could continuously search for anomalies such as impossible numbers of patient encounters, unusually heavy use of expensive billing codes, duplicate services, unexpected changes in billing volume, questionable geographic patterns, services inconsistent with a provider’s specialty, and suspicious referral networks.
None of those indicators would establish fraud.
They would identify claims requiring closer examination.
That distinction is essential.
Algorithms should identify what deserves an audit. Humans should determine what the evidence shows.
Random audits should complement analytics
Sophisticated predictive systems should not be the government’s only defense.
No analytical system should be assumed to identify every form of misconduct.
Providers engaged in intentional fraud may change their methods. New schemes can emerge. Legitimate billing patterns can also resemble suspicious activity.
Random audits would therefore complement risk-based analytics.
Every provider participating in Medicare or Medicaid could face some probability that a statistically valid sample of claims would be independently examined.
The purpose would not be to presume wrongdoing.
Random auditing creates a basic expectation that billing records may eventually have to withstand independent scrutiny.
That is a normal principle of financial accountability.
It should apply when private organizations and professionals receive taxpayer money, too.
Ask patients whether they received the service
Patients themselves could also become a much more active component of payment verification.
Traditional Medicare beneficiaries already receive Medicare Summary Notices showing services and supplies billed to Medicare, what Medicare paid and what beneficiaries may owe.
Medicare instructs beneficiaries to compare those statements with their own records and verify that they actually received the listed services, supplies, and equipment.
Congress and CMS should consider taking that concept further.
Beneficiaries could periodically receive a simplified verification request:
Did you receive this service?
Doctor visit — Yes or No.
Laboratory test — Yes or No.
Medical equipment — Yes or No.
Home-health visit — Yes or No.
Procedure — Yes or No.
This would be a new policy approach, not a description of the current Medicare verification system.
And a patient answering “No” should never automatically trigger an accusation of fraud.
Patients forget appointments. Billing terminology can be difficult to understand. Services may be billed under unfamiliar provider names. Clerical mistakes occur.
But repeated discrepancies could provide useful information.
If numerous patients independently report that they never received the same type of service billed by the same provider, the pattern could generate an audit referral.
Investigators—not an algorithm—would then determine whether there was an innocent explanation, an administrative problem, or evidence warranting further investigation.
Protect honest medical professionals
More auditing must come with equally strong protections for legitimate providers.
Medical billing is extraordinarily complicated.
An incorrect billing code is not automatically fraud.
Missing documentation is not automatically fraud.
An accidental duplicate claim is not automatically fraud.
And disagreement over whether a service satisfied a reimbursement requirement is not necessarily evidence of criminal conduct.
Fraud requires intentional deception.
A stronger auditing system should recognize those distinctions.
Ordinary mistakes could result in corrected claims, provider education, or repayment when appropriate.
Patterns of unsupported or reckless billing could trigger enhanced monitoring.
Evidence suggesting intentional deception could be referred to HHS-OIG, DOJ, or another appropriate law-enforcement agency.
That structure would permit aggressive financial oversight without treating every billing discrepancy as a crime.
The government should follow the evidence
Medicare and Medicaid are among the federal government’s largest and most important programs.
They finance medical care for tens of millions of Americans and involve enormous amounts of taxpayer money.
Even a small percentage of unnecessary, unsupported, or fraudulent payments can therefore represent billions of dollars.
Every dollar intentionally obtained through false billing ultimately comes from taxpayers and the health care system.
Money lost to fraud cannot simultaneously pay for legitimate medical care.
That makes payment integrity more than a law-enforcement issue.
It is a health care affordability issue and a taxpayer issue.
Enforcement success should encourage more oversight
The existing federal enforcement record deserves recognition.
DOJ is prosecuting major health care fraud cases.
HHS-OIG is conducting audits.
Medicaid Fraud Control Units are generating substantial recoveries.
CMS is suspending questionable providers, revoking billing privileges, and increasingly deploying advanced analytics.
The Medicaid Fraud War Room stopped more than $203 million in potentially improper payments during its first 88 days.
CMS reported preventing more than $1.6 billion in potentially improper Medicare laboratory payments through another enforcement initiative.
Those results do not establish how much fraud remains undiscovered.
They establish something else:
Looking works.
That should encourage policymakers to look more often, more systematically and with better technology.
The objective should not be to declare the American medical profession corrupt.
Most medical professionals should never be publicly accused of wrongdoing without evidence.
But receiving federal health care money should carry an expectation of meaningful financial accountability.
Congress should examine whether the existing patchwork of auditing, contractors, program-integrity operations and law-enforcement investigations should be supplemented by an independent Federal Health Care Payment Integrity Authority.
Give it access to claims data.
Give it modern analytical tools.
Give it professional auditors.
Conduct targeted and random audits.
Ask patients to help verify services.
Recover unsupported payments.
Refer evidence of intentional fraud to investigators.
And publicly report how much money the auditing process identifies, prevents, and recovers.
The federal government already has evidence that aggressive health care oversight can save substantial amounts of money.
What it lacks is a reliable measure of all Medicare and Medicaid fraud that remains undetected.
America should not pretend that it does.
Instead, it should build a system that can find out.
Trust legitimate health care providers. Respect the professionals caring for patients. But verify the bills.
Editor’s note: This analysis distinguishes improper payments from criminal fraud. CMS states that improper-payment estimates do not measure fraud. Billing errors, insufficient documentation, and other payment problems do not by themselves establish intentional wrongdoing. The judicial process must establish allegations of criminal fraud.
