The Trump administration is escalating its fight against Medicaid fraud after federal officials warned that fraudulent and improper billings may now total roughly $100 billion annually. The renewed crackdown comes as growing scrutiny is placed on how states oversee the millions of medical providers participating in the Medicaid system.
On April 21, Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz announced that states will now be required to strengthen their procedures for reviewing Medicaid providers. Under existing federal law, states must revalidate enrolled providers at least once every five years to confirm they remain properly licensed, legally compliant, and eligible to participate in the program.
The process is intended to serve as a basic safeguard against fraud, but critics argue many states have failed to carry out even these minimum standards consistently.
A watchdog organization that filed Freedom of Information Act requests with nearly every state says the responses reveal widespread failures in provider oversight. According to the group, many states either failed to respond entirely or provided incomplete data that made meaningful review impossible.
Among the states that did provide records, the findings raised concerns about how many providers have gone years without being revalidated. In Georgia, approximately 21,000 Medicaid providers reportedly have not undergone revalidation within the required five-year window. In Illinois, more than a quarter of the state’s roughly 222,000 Medicaid providers have exceeded the federal timeline, including at least one provider that reportedly has not been reviewed in more than nine years.
Officials and analysts caution that delayed revalidation does not automatically mean providers are committing fraud. Still, experts say weak oversight creates opportunities for abuse, identity theft, and improper billing schemes to flourish undetected.
The revalidation process includes verifying medical licenses, checking exclusion databases, reviewing death records, and ensuring providers remain legally authorized to bill Medicaid. Without regular reviews, fraudulent actors can continue operating for years while collecting taxpayer-funded reimbursements.
The administration has already pointed to several recent fraud investigations as examples of the broader problem. Federal officials suspended 447 hospice providers in Los Angeles earlier this year over allegations involving more than $600 million in suspected fraudulent billings. Prosecutors in California have also charged multiple individuals accused of using stolen identities — including those of deceased physicians — to submit millions in fake hospice claims through shell operations and phantom clinics.
In Minnesota, investigators previously uncovered major fraud schemes connected to healthcare and social service providers, fueling broader concerns about oversight failures nationwide. Some providers excluded from Medicaid participation in one state have allegedly continued billing programs in other states because exclusion data was not properly shared or enforced at the federal level.
The Trump administration has now given governors and state agencies 30 days to submit plans explaining how they will improve provider oversight and comply with federal review requirements.
Supporters of the crackdown argue that stricter enforcement could save taxpayers billions of dollars annually. Federal officials noted that similar provider reviews conducted within Medicare in the early 2010s led to hundreds of thousands of provider deactivations and revocations, saving an estimated $2.4 billion.
Some policy advocates now argue that even the five-year revalidation cycle is too infrequent. They believe providers should face more regular reviews to prevent bad actors from exploiting long gaps in oversight.
The debate is likely to intensify as lawmakers continue discussing healthcare spending, entitlement reform, and government accountability ahead of future budget negotiations.
