Why It Matters

The total amount of Medicaid fraud is unknown, according to a new Congressional Research Service report. However, the research distinguishes fraud from the broader category of improper payments. ​

The report notes that the Centers for Medicare & Medicaid Services (CMS) estimated 77% of improper Medicaid payments in fiscal 2025 resulted from insufficient documentation rather than fraud or abuse. That distinction shapes how Congress and the Trump administration frame oversight responses.

The Big Picture

CMS administers the Medicaid Integrity Program, which audits and monitors state Medicaid programs; the Department of Health and Human Services' Office of the Inspector General (HHS OIG) conducts audits and oversees state Medicaid Fraud Control Units (MFCUs); and the Department of Justice (DOJ) investigates and prosecutes fraud cases while coordinating federal, state, and local law enforcement.

State MFCUs reported recovering $2 billion from criminal and civil cases in fiscal 2025. CMS separately reported that program integrity activities for Medicaid and the Children's Health Insurance Program (CHIP) saved the federal government $1.5 billion in fiscal 2024.

CMS's "Crushing Fraud, Waste, & Abuse" initiative includes the Medicaid Fraud War Room, which CMS reported stopped more than $203 million in potentially improper payments during its first 88 days.

States are required to screen providers before enrollment, contract with recovery audit contractors to identify and recoup overpayments, and wherever they operate managed care, to conduct independent audits of managed care financial and encounter data.

The Government Accountability Office (GAO) placed "Strengthening Medicaid Program Integrity" on its High Risk List in February 2025. Program integrity covers administrative activities ensuring that state Medicaid programs, providers, and enrollees operate in accordance with federal and state law, encompassing fraud, waste, and abuse prevention as well as oversight of improper payments and overpayments.

Medicaid covered an estimated 85 million people at an estimated cost of $949 billion in fiscal 2024.

The Bottom Line

The total amount of Medicaid fraud is unknown; however it's estimated that 77% of improper Medicaid payments in fiscal 2025 resulted from insufficient documentation rather than fraud or abuse.

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