House Republicans have introduced 14 bills aimed at combating healthcare fraud in Medicare and Medicaid, following a congressional report estimating $233 billion to $521 billion in annual taxpayer losses due to fraud in federal programs.
The House Energy and Commerce Committee shared the legislative package, which includes provisions to strengthen state-level enforcement, incentivize fraud recovery, and reduce bureaucratic hurdles in recouping stolen funds. One bill, the HELPSTEPS Act, would allow states to retain up to 25% of recovered Medicaid overpayments—provided the funds are reinvested in fraud prevention efforts such as audits, investigations, and data analytics.
Key developments in the anti-fraud push
The legislative push follows a congressional report released Tuesday, which highlights vulnerabilities in Medicaid and Medicare that have contributed to widespread fraud. The report cites a 2024 Government Accountability Office estimate placing annual fraud losses in federal programs at $233 billion to $521 billion, with healthcare programs accounting for 24% of federal spending in 2024.
The House Energy and Commerce Committee argues that fraud in federally subsidized healthcare programs impacts every American, either directly through higher costs or indirectly through reduced program funding. The committee’s report states: “Every dollar stolen from federal healthcare programs is a dollar that is not spent on high-quality healthcare for those who need it most.”
Staffing cuts and enforcement challenges
A separate 87-page congressional report alleges that program integrity staffing at the Centers for Medicare & Medicaid Services (CMS) was drastically reduced under the Biden administration. According to the report, the number of Medicare and Medicaid program integrity personnel dropped from 80 to 6 between January 2021 and January 2025.
At an April 21 hearing, HHS Secretary Robert F. Kennedy Jr. testified that the administration implemented a "pay and chase" billing system, where CMS paid claims first and attempted to recover fraudulent funds later—a process he described as ineffective. Kennedy stated that Biden administration officials had instructed staff to prioritize enrollment over fraud prevention.
The committee’s report concludes that these staffing cuts left CMS unable to combat fraud effectively, as the agency was operating at a severely reduced capacity.
Proposed legislative measures and incentives
The 14-bill package includes several measures designed to enhance state-level enforcement and improve fraud detection. Key provisions include:
- Financial incentives for states: The HELPSTEPS Act would allow states to retain a portion of recovered Medicaid overpayments—up to 25%—if the funds are reinvested in fraud prevention activities.
- Stronger state enforcement tools: Bills aim to equip states with additional authority to identify and address fraud schemes.
- Reduced bureaucracy: Proposals seek to streamline processes for states to recoup lost funds and pursue fraudsters.
The committee’s report argues that these measures are necessary to close loopholes in the system and reduce improper payments, which have contributed to the escalating financial burden on taxpayers.
Ongoing debate over healthcare fraud prevention
The legislative push comes amid growing concerns about the scale of fraud in federal healthcare programs. While the Government Accountability Office has estimated losses between $233 billion and $521 billion annually, the exact amount lost specifically to Medicare and Medicaid fraud remains unclear.
Critics of the current system argue that reactive enforcement models, such as the "pay and chase" approach, have failed to deter fraud effectively. Proponents of the new bills contend that proactive measures, including increased state-level enforcement and financial incentives, are essential to protect taxpayer dollars and ensure program integrity.
The House Energy and Commerce Committee has not yet scheduled a vote on the bills, but the proposals signal a potential shift in federal anti-fraud strategy as lawmakers seek to address one of the most pressing financial challenges facing Medicare and Medicaid.