Bombshell report exposes healthcare fraud schemes as taxpayers lose up to $521 billion annually

FIRST ON FOX: House GOP lawmakers are rolling out a slew of new bills after a bombshell report found that hundreds of billions of taxpayer dollars are potentially being targeted by fraudsters every year.

As people across the U.S. are battling high costs that make it hard to make ends meet, a report released Tuesday by the House Energy & Commerce Committee warns that federally subsidized healthcare programs are rife with fraud and abuse — “impacting every single American, in one way or another.”

While no estimate for Medicare and Medicaid fraud exists specifically, the report noted, a 2024 estimate by the Government Accountability Office said $233 billion to $521 billion taxpayer dollars going to federal programs are lost to fraud every year. Federal healthcare programs accounted for 24% of federal spending in 2024, according to the Center on Budget Policy and Priorities.

Medicaid specifically is rife with vulnerabilities making it susceptible to fraud, the report said, which is why House Republicans are rolling out 14 bills aimed at closing loopholes in the system, shrinking bureaucracy, and making it easier for states to recoup lost dollars while also incentivizing them to go after potential fraudsters.

“Taxpayers that fund benefit programs with federal and state taxpayer dollars are cheated by fraud, inflating healthcare costs that are passed along to everyone,” the committee’s report states. “Every dollar stolen from federal health care programs is a dollar that is not spent on high quality healthcare for those that need it most.”

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“The amount of fraud that the Biden-Harris Administration allowed to go unchecked in government health programs is unacceptable. Every dollar stolen by fraudsters or wasted on improper payments is a dollar that cannot be used to support families in need who rely on these programs,” House Energy & Commerce Committee Chairman Brett Guthrie, R-Ky., told Fox News Digital.

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Republicans’ new bills can be lumped into three categories: legislation aimed at improving identification of fraud in state and federal health programs, legislation aimed at enforcing anti-fraud rules, and legislation to hold states that allow fraud to run rampant accountable.

One bill led by Republican Study Committee Chairman August Pfluger, R-Texas, for example, would force states to designate a single role for internal financial controls of state Medicaid programs.

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A bill by Rep. Mike Rulli, R-Ohio, would force each state to annually report to the federal government on any potential Medicaid fraud vulnerabilities and their plan to fix it.

And legislation by Rep. Nick Langworthy, R-N.Y., would require states to check whether someone enrolling for Medicaid was removed from another taxpayer-funded healthcare program.

The report released on Tuesday said that Medicaid spending accounts for an average 30.7% of states’ budgets, and that those outlays have increased exponentially in recent years.

States like New York and California are also projected to see costs spike, the report said.

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The Golden State is expected to see annual Medi-Cal spending, its state healthcare program, rise from $83 billion per year in 2014 to $219.7 billion by 2027, the report said, adding, “New York is projected to spend 11% more on Medicaid from all funding sources in 2027 — a total of $124 billion.”

The report noted that federal healthcare is ripe for fraud given its size and complexity, as well as the traditional enforcement model of “pay and chase,” which relies on law enforcement to investigate fraud suspicions after a false claim has already been settled.

Provider fraud is also a common area of losing tax dollars, with healthcare providers being known to submit multiple claims for a single service or bill services and equipment for patients that they have never seen at all, the report said.

Transnational criminal groups have also profited from U.S. healthcare fraud, the report said, alleging that hardworking Americans are seeing their tax dollars not only lost to fraud at home but overseas as well.

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The Department of Justice’s (DOJ) “Operation Gold Rush” uncovered that Russian organized crime actors billed over $10 million in false claims made via 30 medical supply companies they purchased in a years-long scheme, the report said.

It highlighted further foreign healthcare schemes that saw malign actors in Hong Kong, Georgia, Estonia, Pakistan and elsewhere attempt to steal billions more in U.S. taxpayer dollars.

The fraud reports come at a time when millions of Americans across the country are struggling with high living costs that have made it a challenge to make ends meet.

Guthrie said the House GOP legislative package amounted to “commonsense steps” to ensure states can recoup lost fraud dollars and incentivize them to close loopholes in the future.

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It comes as the Trump administration is also prioritizing healthcare fraud crackdowns. Vice President JD Vance announced last week that 760,000 enrollees under the Affordable Care Act, also known as ObamaCare, would be removed over fraud claims.