One of the tried and true tactics used by opponents of social safety net programs is the levelling of accusations of “fraud and waste.” Those accusations are aimed at the recipients of programs like SNAP (food stamps), Medicare and Medicaid–conveying the accusers’ clear belief that impoverished people are lazy, sneaky and corrupt (and probably Black), and thus should not be entitled to benefits supported by their taxes. Acceptance of that (false) premise has led to the imposition of expensive bureaucratic hurdles intended to “weed out” the miscreants.
It turns out that there actually is fraud and waste in those programs–but in the overwhelming majority of cases, it comes from institutional actors–from insurers, drug companies, pharmacies, hospitals and providers. Studies confirm that beneficiary fraud is comparatively tiny.
I thought about that research when I read a recent opinion piece published by Jacob Stewart in the Indianapolis Star. Stewart focused upon a federal whistleblower lawsuit first filed in 2024 that accused hospitals and insurance companies of defrauding the state’s Medicaid program to the tune of $724 million.
The lawsuit had been filed after whistleblowers found reports from the state’s fraud detection contractor identifying hundreds of millions of dollars in potentially fraudulent claims between 2015 and 2020. The complaint asserted that, starting in late 2017, state Medicaid officials had begun “bowing to political pressure exerted by the health insurers and the hospitals’ lobby” and had improperly directed the Program Integrity team to curtail its efforts to recoup improper Medicaid overpayments. The suit further alleged that the political pressure came after hundreds of thousands of dollars had been spent by those institutional actors on lobbying and political contributions, money that had created a “revolving door between the state’s Medicaid office and the health care industry.”
The judge dismissed that lawsuit, finding that the complaint failed to identify specific false claims with enough particularity and that the former state employees who’d filed the suit had failed to demonstrate that the potentially fraudulent nature of these claims had a material impact on the government’s decision to pay them, but she granted leave to the plaintiffs to refile, which they did. (The link is to the refiled version.)
According to Stewart,
The original complaint alleged that in late 2017, state Medicaid officials started “bowing to political pressure exerted by the health insurers’ and the hospitals’ lobby” and curtailed efforts to recoup improper payments.
Then-Gov. Eric Holcomb had close ties with hospital and healthcare lobbyists. He received significant campaign contributions from industry executives and maintained a revolving door of top administrative advisers who transitioned directly into lobbying roles.
Stewart pointed out that, during Holcomb’s tenure, the state had experienced a large drop in improper payment recovery from healthcare providers. That drop, according to Stewart, occurred because the state “flipped its approach,” spending less time and effort clawing back overpayments and more effort chasing money that hospitals said they were owed.
Whatever the outcome of this case, the allegations are consistent with a growing number of studies showing that most monetary loss from fraud in these programs is attributable to providers, not beneficiaries. (A FY 2023 federal fraud enforcement report found virtually no beneficiary fraud. Accusations of “improper payment” rates — frequently cited as evidence of rampant fraud — mostly reflect missing documentation or administrative error.)
Studies also suggest that Medicare Advantage is where the most striking improprieties occur. In January, MedPAC, Medicare’s official independent monitor, reported that Medicare Advantage payments are running about $76 billion — 14% — above what the same beneficiaries would have cost in traditional Medicare.
Those overages cost us all. An investigation by the Senate Joint Economic Committee found that Medicare Advantage overpayments raised Medicare Part B premiums by $212 per person in 2025 alone —and that they have added $82 billion to premiums since 2016. Those costs have been borne by all Medicare enrollees. The committee’s chairman charged that, “between aggressive upcoding, questionable quality bonuses, and structural overpayments in Medicare Advantage, seniors who stay in traditional Medicare are effectively subsidizing the system.”
If citizens really want to know who is responsible for “fraud and waste,” a look at lawsuits actually brought by the Department of Justice is enlightening. Defendants in those cases are overwhelmingly providers, pharmacies, and corporate actors — not patients.
When accusations of “fraud and waste” are levelled at beneficiaries, that misdirection does more than let the real perpetrators off the hook. It allows legislative opponents of social safety net programs to add new and onerous “oversight” provisions to these programs–provisions that keep numbers of eligible people from accessing benefits and that add to the multiple burdens imposed on recipients.
But then, it’s easier to beat up on poor people…
Yes. How else are Republicans going to justify their abhorrence for ANY social benefits? They are compelled to lie, because the recipients of the benefits – that their taxes have paid for – like the assistance. That is, of course, anathema to the silk suits in executive offices (take your pick of the companies) and on Wall Street.
I listened to a canned diatribe by none other than Marco Rubio trying to scare people about democratic socialism and how all those “freedoms” will be removed because of the programs that educate, make healthy and create safety nets for the citizens of the country. Democratic socialism WORKS throughout Europe and other industrialized nations.
Republicans are paid to ignore the good that those paid-for benefits do, because their employers want the tax money to pad their wallets. What these greedy bastards don’t get is that an educated, healthy society is a more productive society and that will make the silk suits even richer while the working/consumer classes live better lives.
I know, I know … Logical thinking and long-sightedness is not on the Republican agenda.
The fraud statistics by the public regarding Medicaid and Medicare rival that of the actual criminal immigrants now in Trump’s prison camps. The last statistic I saw was 30% of the immigrants were actual criminals as we believe the term to mean that have committed crimes at convictional levels. There are bad apples in all barrels which could have been denied Medicare and Medicaid assistance through thorough investigation before providing it.
We, as a nation, needed no investigation regarding Trump’s decades of “Fraud and Waste” as he proudly sought publication of his “wins” against those he committed fraud. Remember that popular song a few years back, “One Monkey Don’t Stop No Show”? We have somehow managed to allow this One Monkey and his Flying Monkeys to stop this nation in its tracks and spread globally and we watch as he commits “Fraud and Waste” daily as he commits physical destruction of this nation’s government and its landmarks and openly commits War Crimes killing innocents globally. Here at home we need to find a way to end his determined efforts to end Medicare, Medicaid, Social Security, health care and other earned benefits in general for all; is he using War Crimes as another distraction to crimes he is accomplishing against working, elderly and disabled Americans who are paying for his ability to commit these crimes.
The “overhead” to process traditional Medicare claims is in the 2-5% range. The overhead that Medicare Advantage providers impose is in the 20-25% range. If you want to investigate fraud, that’s the first place you should look, but lobbyists have made that fraud legal in the name of corporate profits.
What no Medicare advantage provider tells you is that Medicare advantage plans have many more pitfalls and limitations than traditional Medicare. This year we are starting to see Advantage providers warn about excluding certain big providers from their network because they can’t squeeze enough profits out of the contract negotiations. People will be forced to change doctors and hospitals. The other problem with the Medicare “dis”-Advantage plans is like regular insurance, “the network” often only covers a limited geographic area, so spending the winter in snowbird country will mean either skipping routine healthcare visits, paying out of pocket, or filing extra paperwork to hopefully get pre approval. This is on top of having to purchase extra travel insurance, so if something really bad does happen, you can afford to be transported back “in-network” to get coverage and ongoing treatment. The worst thing these plans don’t tell you is they often have severe lifetime caps on coverage that traditional Medicare doesn’t have and will bankrupt a person just as they get their sickest.
My Financial Advisor connected us with a Medical insurance advisor to learn all of these details. I don’t know what it takes to opt out of an Advantage plan once you’ve enrolled, but I suspect savvy lobbyists have made that process extremely difficult as well.
Fraud and waste are the point of our healthcare system, but not at the beneficiary level. If a recipient defrauds the government, they may get $120 a month in food stamps, but if a healthcare company defrauds the US government, it’s to the tune of millions, if not more.
Our healthcare systems are not for US citizens – they benefit the oligarchy. And, if you’re Rick Scott, all is forgiven. Instead, the politicians defraud the system, and if you’re a republican and swear your allegiance to Trump, you get pardoned.
These fraudsters are not a design flaw of the healthcare system – they are its features. I remember when Republicans were pandering to their racist MAGA base, that black women were taking food stamps and buying drugs with their allotment. They decided to drug-test recipients to stop the fraud. They spent over one million dollars testing moms to save a minimal amount. The judicial branch said the testing was illegal. DUH!! Otherwise, Republicans would make it mandatory for all recipients. Is that ignorance, or a political campaign strategy?
As the story, which I couldn’t find, went that as Trustee Julia Carson and her staff, on their own time, checked on recipients for Trustee assistance and cited those who did not qualify to be removed and repay the benefits in court they had rece4ived. The vast increase in population numbers and businesses and political officials now would prevent such personal action but: “In 1990, Carson then won the election as Center Township trustee. While in this position, she reversed a $20 million debt to a $6 million surplus by organizing workfare programs for non-disabled relief recipients. During the time that she worked in these local and state government positions, she held a day job as the human resources director for an electric company.
Carson’s mentor, Andy Jacobs Jr., is credited with encouraging Carson to run for national office in 1996. She became the first woman and the first African American to represent Indianapolis in Congress, a position she held for six terms.” Her grandson, Rep. Andre Carson, now sits as Indiana’s only democracy supporting official at the federal level.
“An ounce of prevention is worth a pound of cure.” Stop the abuses before they begin; recognizing Trump’s decades of public “Fraud and Waste” long before he attacked the Constitution of the UNITED States of America from inside the deteriorating White House and grounds, would have prevented the route to national and global poverty levels for all but billionaires such as those who own Trump and through him own this nation.
I have an Advantage plan and am extremely happy with it and it’s payouts. I am blessed to be very healthy and have only used it for dental coverage and one emergency visit and corresponding orthopedic visit in the 10 years I’ve had it. More than one person has told me that a catastrophic event will cause me to think differently. I guess I’ll have to see then.
Dan Mullendore; my IU Health Plan resolved my Medicare Advantage advantage by simply dropping the Medicare Part C supplemental plan I opted into. The program they offered to replace it, Medicate Part G (programs now go to Part N), meant paying for major coverages I did not need and could not use and included a Late Enrollment Penalty (LEP) for not registering with Medicare Part D for prescription coverage when it was initially offered years ago. There has always been those “small print” areas in health care coverages which are still in the Medicare system today.
Thank you for your researched information; I am currently seeking a form of health care after leaving IU Health Plan which refused to forward any of my medical records to a new provider and blocked me from my personal Portal connection to provide necessary information to a provider who was accepting new patients but have not provided a Primary Care Physician in 4 1/2 months but have ordered 2 prescriptions for me. At this time, I have no idea if I have health care coverage..
the I.G. i guess wasnt awake? or subfunded intentionally.or trumped outta the way. if you were to investigate the growth of fraud,you would find lawyers and grifters familiar with this line of fraud. seems like the present congress is too suited up. time for some more working class members to join. if the system is gamed in name for the few,then the people who have lost the most from any industry/wealth need a front row seat to voice who, is getting the hits first. if your eyeing a place for the leftist running for office, ya might want to take notice of who running, is speaking about this issue,in public. those who dont accept bribes for air time. screw the suits,were 45 years into upward wealth anf greed growth. time for a change,for the majority..
for the educators herthe guardian today
Alice Sperri.
Dialogue is all the rage,,why is the right pouring millions into civil discourse initiatives on U S campuses.
The voters in Florida rewarded the biggest Medicare fraudster by electing him to the United States Senate— Scott has never been held accountable for his fraud.
Roberta,
You need to thank God for your good health. Did you speak with your doctor before enrolling in an advantage plan? A friend of mine is a hospitalist at a major medical center in this area. She is so frustrated with insurers in advantage programs, because so much needs pre-approval and decisions are often arbitrary and incomprehensible.
Remember stuff happens. I was healthy, walking every morning, swimming when the water was warm, and doing a light weight workout every evening. Then I was diagnosed with Parkinson’s. Today, I struggle to accomplish even light workouts. I’m really glad I have regular Medicare. I’ll pray for your continuing good health, until universal single payer health care becomes law.
THINK,
VOTE!!!
Seems like a shell game with all the mailings from the advantage Plans explaining year to date what they’ve paid, what you’ve paid and how much more before you get full coverage, which never happens. This year IU advantage dropped eye and dental coverage which we had to sign up for an additional policy. I have them deduct the payment directly from my SSI. After going to my last eye Dr. appt. I received a bill not as copay to the doctor, but as a copay to the insurance company! I have the premium coverage plan and that’s not what I was expecting when I signed up. When the insurance companies and the hospitals are vying for dollars it’s the patient care that’s secondary in the transaction. Health care is rationed and seniors are for the most part on maintenance care. The good thing is that there’s a lot we can do to enhance our own health with healthy diet, exercise and positive social engagement.
A spotlight needs to be put on the deals the state government is selling to health insurance companies and conglomerate providers. We have laws that 80% of health insurance dollars have to go for pt. care and it seems there is too much skimming off the top for that to be the case in advantage plans.
Thank You Sheila and Commenters.
My former employer who is legally responsible for health care to Union Retirees, awared in a Federal Bankruptcy Filing, switched from a Medicare Supplement Plan to Advantage Plan two plus years ago. First UHC and now Humana PPO. Many providers will not honor Humana Advantage Plans; action which seems to cancel the PPO part of our current retirees employer provided plan.
I am currently using CenterWell, a Humana subsidiary, for Senior Health Care. CenterWell has what seems like a good program (although Humana will only allow $20. for my Chiropractor appt, and CenterWell doesn’t seem to want to write scripts for non Humana affiliated Pharmacies and uses contract companies, to schedule other providers for services and tests which are beyond the treatment area of CenterWell Primary Care, for patients).
If I go back to Medicare, I lose this Retiree Benefit forever sermingly saving the company from intentional violation of Fed Bankruptcy Rulings.
Scott was notified, the night before an indictment was to be handed down, of the indictment’s coming, and he resigned that night. The indictment, therefore, was no longer going to affect him. Who writes the rules for these things? The politicians.