“One out of each $5 or $6 in Medicaid [payments] is improper.”
Russell Vought acknowledged on June 1, 2025, in an interview on CNN’s “State of the Union.”
Responding to prices that President Donald Trump’s tax and spending invoice would lower Medicaid protection for hundreds of thousands of People, Trump administration officers misleadingly counter that it targets solely waste, fraud, and abuse.
Throughout an interview on CNN’s “State of the Union,” Russell Vought, the administration’s director of the Workplace of Administration and Finances, framed Medicaid as sagging beneath the burden of improper funds.
An “improper” cost refers to funds made erroneously to beneficiaries and their suppliers or with out adequate documentation.
Pressed June 1 by CNN host Dana Bash about issues that low-income People would undergo if the invoice turns into regulation, Vought known as such arguments “completely ridiculous.”
“This invoice will protect and defend the packages, the social security web, however it’s going to make it rather more commonsense,” Vought stated. “Look, one out of each $5 or $6 in Medicaid [payments] is improper.”
That may imply Medicaid’s improper cost charge is 16% to twenty%.
In a 2024 report overlaying the years 2022, 2023, and 2024, Medicaid’s father or mother company — the Facilities for Medicare & Medicaid Providers — stated the speed was about 5.1%.
One conservative group, the Paragon Well being Institute, stated the company has been utilizing an incomplete calculation methodology and that the share may very well be as excessive as 25%. Different consultants informed PolitiFact that the precise numbers may very well be increased than what the federal authorities reviews, though not as excessive as Paragon’s estimate.
The White Home didn’t reply to an inquiry for this text.
How Excessive Is the Medicaid Improper Fee Charge?
Medicaid and its carefully associated Youngsters’s Well being Insurance coverage program gives well being care and long-term care to roughly 83 million lower-income beneficiaries, accounting for about one-fifth of well being care spending total. It’s funded via a mixture of federal and state cash and is run by states beneath federal authorities guidelines.
Yearly, the Facilities for Medicare & Medicaid Providers publishes official numbers for the share of improper Medicaid funds, and in different federal medical health insurance packages the company oversees.
In a 2024 evaluate of funds made in 2022, 2023, and 2024, the company discovered that 5.09% of Medicaid funds totaling $31.10 billion have been improper.
The 5.09% charge represented a lower from the 8.58% charge cited in its 2023 report, which was additionally primarily based on a three-year time span. The 2024 determine represented the third consecutive annual decline.
Are These Numbers Full?
In March 2025, Brian Blase, a conservative well being coverage analyst and president of Paragon Well being, a well being coverage suppose tank, co-authored a report that stated the official CMS improper cost charge figures have been unrealistically low for eight of the previous 10 years, as a result of in some years the company did not endure widespread auditing of its beneficiaries’ Medicaid eligibility.
From 2017 to 2019, throughout Trump’s first time period, Blase served as Trump’s particular assistant for financial coverage. Earlier than that, he served as a well being coverage analyst for the Senate Republican Coverage Committee and has labored for the Heritage Basis, a conservative suppose tank.
The report stated if the company’s evaluation had checked out eligibility checks yearly, extra ineligible beneficiaries and funds on their behalf would have been found. The report stated this might need elevated the improper cost charge as excessive as 25%, primarily based on the charges present in 2020 and 2021, when a excessive variety of eligibility checks have been included within the company’s methodology.
Nonetheless, it’s arduous to verify whether or not lack of eligibility auditing induced increased improper cost charges in 2020 and 2021, stated Jennifer Wagner, director of Medicaid eligibility and enrollment on the Middle on Finances and Coverage Priorities, a liberal suppose tank.
Wagner stated Medicaid enrollment procedures have fluctuated, which might assist clarify the upper charges in some years slightly than others. Utilizing two years of information to generalize about developments throughout a decade, she stated, is just not essentially legitimate.
Robert Westbrooks, the federal Pandemic Response Accountability Committee government director who labored in authorities oversight roles throughout Democratic and Republican administrations, informed PolitiFact it’s believable that the formally reported improper cost charges for Medicaid may very well be too low.
Nonetheless, Westbrooks stated pinpointing how a lot increased the speed is in actuality is a speculative course of. “I don’t consider anybody can credibly quantify the [difference],” he stated.
What Is an Improper Fee?
Well being care consultants emphasised that improper funds will not be the identical factor as waste, fraud, or abuse.
CMS maintains official definitions for these phrases:
- Fraud: “When somebody knowingly deceives, conceals, or misrepresents to acquire cash or property from any well being care profit program.”
- Waste: “Overusing companies or different practices that instantly or not directly end in pointless prices to any well being care profit program. Examples of waste are conducting extreme workplace visits, prescribing extra medicines than essential, and ordering extreme laboratory exams.”
- Abuse: “When well being care suppliers or suppliers carry out actions that instantly or not directly end in pointless prices to any well being care profit program,” which might embody overbilling or misusing billing codes.
In contrast, an improper cost “consists of any cost to an ineligible recipient, any cost for an ineligible good or service, any duplicate cost, any cost for a superb or service not acquired, and any cost that doesn’t account for credit score for relevant reductions,” KFF, a well being data nonprofit that features KFF Well being Information, wrote this 12 months.
“Though all fraudulent funds are improper, not all improper funds are fraudulent,” stated Jessica Tillipman, affiliate dean for presidency procurement regulation at George Washington College’s regulation faculty. “Most suppliers establish the improper funds and return them understanding how aggressively enforced” the authorized provisions are. “After they don’t, they open the door to important legal responsibility.”
CMS stated about 79% of improper funds occurred when there was inadequate documentation.
This sometimes concerned circumstances during which a state or supplier missed an administrative step, and it didn’t essentially point out fraud or abuse, the company stated. As a substitute, it may very well be an unintended oversight or mistake.
In different phrases, it was uncommon for unusual beneficiaries to be scamming the federal government. “The overwhelming majority of fraud in Medicaid is dedicated by suppliers or different actors, not enrollees,” Wagner stated.
Our Ruling
Vought stated that “one out of each $5 or $6 in Medicaid [payments] is improper.”
The official improper cost charge calculated by the Facilities for Medicare & Medicaid Providers in 2024 was about 5%, smaller than the 16% to twenty% charge Vought described.
A well being coverage analyst and former Trump adviser stated methodological shortcomings within the company’s evaluation might imply the speed is as excessive as 25%. Though it’s potential the speed is increased than the 5% the federal government reported, how a lot increased is speculative.
The assertion incorporates a component of reality however ignores vital information, particularly the federal authorities’s personal information. We charge the assertion Principally False.
Our Sources
Russell Vought, interview with CNN’s “State of the Union,” June 1, 2025.
Facilities for Medicare & Medicaid Providers, “Fiscal Yr 2024 Improper Funds Truth Sheet,” Nov. 15, 2024.
Facilities for Medicare & Medicaid Providers, “PERM Error Charge Findings and Studies,” accessed June 4, 2025.
Facilities for Medicare & Medicaid Providers, “2024 Medicaid & CHIP Supplemental Improper Fee Information,” accessed June 4, 2025.
Paymentaccuracy.gov, “Annual Improper Funds Datasets,” accessed June 3, 2025.
KFF, “5 Key Information About Medicaid Program Integrity — Fraud, Waste, Abuse and Improper Funds,” March 18, 2025.
KFF, “Digital Occasion Transcript — The Well being Wonk Store: Understanding Fraud and Abuse in Medicaid,” April 24, 2025.
Paragon Well being Institute, “Medicaid’s True Improper Funds Double These Reported by CMS,” March 3, 2025.
Authorities Accountability Workplace, “Improper Funds: Info on Businesses’ Fiscal Yr 2024 Estimates,” March 11, 2025.
Electronic mail interviews with Tammie Smith and Craig Palosky, spokespersons for KFF, June 2, 2025.
Electronic mail interview with Jennifer Wagner, director of Medicaid eligibility and enrollment on the Middle on Finances and Coverage Priorities.
Electronic mail interview with Jessica Tillipman, affiliate dean for presidency procurement regulation at George Washington College’s regulation faculty, June 3, 2025.
Electronic mail interview with Robert Westbrooks, Pandemic Response Accountability Committee government director who labored in authorities oversight roles throughout Democratic and Republican administrations, June 3, 2025.
KFF Well being Information is a nationwide newsroom that produces in-depth journalism about well being points and is among the core working packages at KFF—an impartial supply of well being coverage analysis, polling, and journalism. Study extra about KFF.
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