“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 costs that President Donald Trump’s tax and spending invoice would lower Medicaid protection for thousands and thousands of Individuals, 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 Funds, framed Medicaid as sagging below the burden of improper funds.
An “improper” fee refers to funds made erroneously to beneficiaries and their suppliers or with out ample documentation.
Pressed June 1 by CNN host Dana Bash about considerations that low-income Individuals would undergo if the invoice turns into regulation, Vought known as such arguments “completely ridiculous.”
“This invoice will protect and shield the applications, the social security internet, however it is going to make it way more commonsense,” Vought mentioned. “Look, one out of each $5 or $6 in Medicaid [payments] is improper.”
That may imply Medicaid’s improper fee charge is 16% to twenty%.
In a 2024 report protecting the years 2022, 2023, and 2024, Medicaid’s mum or dad company — the Facilities for Medicare & Medicaid Providers — mentioned the speed was about 5.1%.
One conservative group, the Paragon Well being Institute, mentioned the company has been utilizing an incomplete calculation technique and that the proportion could possibly be as excessive as 25%. Different consultants advised PolitiFact that the precise numbers could possibly be increased than what the federal authorities studies, 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 intently associated Kids’s Well being Insurance coverage program offers well being care and long-term care to roughly 83 million lower-income beneficiaries, accounting for about one-fifth of well being care spending general. It’s funded by means of a mixture of federal and state cash and is run by states below 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 applications the company oversees.
In a 2024 assessment of funds made in 2022, 2023, and 2024, the company discovered that 5.09% of Medicaid funds totaling $31.10 billion had been improper.
The 5.09% charge represented a lower from the 8.58% charge cited in its 2023 report, which was additionally based mostly 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 mentioned the official CMS improper fee charge figures had been unrealistically low for eight of the previous 10 years, as a result of in some years the company did not bear 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 mentioned 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 mentioned this may need elevated the improper fee charge as excessive as 25%, based mostly on the charges present in 2020 and 2021, when a excessive variety of eligibility checks had been included within the company’s methodology.
Nevertheless, it’s arduous to substantiate whether or not lack of eligibility auditing precipitated increased improper fee charges in 2020 and 2021, mentioned Jennifer Wagner, director of Medicaid eligibility and enrollment on the Middle on Funds and Coverage Priorities, a liberal suppose tank.
Wagner mentioned Medicaid enrollment procedures have fluctuated, which may assist clarify the upper charges in some years fairly than others. Utilizing two years of knowledge to generalize about traits throughout a decade, she mentioned, shouldn’t be essentially legitimate.
Robert Westbrooks, the federal Pandemic Response Accountability Committee govt director who labored in authorities oversight roles throughout Democratic and Republican administrations, advised PolitiFact it’s believable that the formally reported improper fee charges for Medicaid could possibly be too low.
Nevertheless, Westbrooks mentioned pinpointing how a lot increased the speed is in actuality is a speculative course of. “I don’t imagine anybody can credibly quantify the [difference],” he mentioned.
What Is an Improper Fee?
Well being care consultants emphasised that improper funds should not 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 lead to pointless prices to any well being care profit program. Examples of waste are conducting extreme workplace visits, prescribing extra drugs than crucial, and ordering extreme laboratory assessments.”
- Abuse: “When well being care suppliers or suppliers carry out actions that instantly or not directly lead to pointless prices to any well being care profit program,” which may embody overbilling or misusing billing codes.
In contrast, an improper fee “consists of any fee to an ineligible recipient, any fee for an ineligible good or service, any duplicate fee, any fee for an excellent or service not obtained, and any fee that doesn’t account for credit score for relevant reductions,” KFF, a well being data nonprofit that features KFF Well being Information, wrote this yr.
“Though all fraudulent funds are improper, not all improper funds are fraudulent,” mentioned Jessica Tillipman, affiliate dean for presidency procurement regulation at George Washington College’s regulation faculty. “Most suppliers establish the improper funds and return them figuring out how aggressively enforced” the authorized provisions are. “After they don’t, they open the door to vital legal responsibility.”
CMS mentioned about 79% of improper funds occurred when there was inadequate documentation.
This usually concerned instances by which a state or supplier missed an administrative step, and it didn’t essentially point out fraud or abuse, the company mentioned. As an alternative, it could possibly be an unintentional oversight or mistake.
In different phrases, it was uncommon for abnormal beneficiaries to be scamming the federal government. “The overwhelming majority of fraud in Medicaid is dedicated by suppliers or different actors, not enrollees,” Wagner mentioned.
Our Ruling
Vought mentioned that “one out of each $5 or $6 in Medicaid [payments] is improper.”
The official improper fee 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 mentioned methodological shortcomings within the company’s evaluation may imply the speed is as excessive as 25%. Though it’s attainable the speed is increased than the 5% the federal government reported, how a lot increased is speculative.
The assertion accommodates a component of reality however ignores crucial info, specifically the federal authorities’s personal knowledge. 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 12 months 2024 Improper Funds Reality Sheet,” Nov. 15, 2024.
Facilities for Medicare & Medicaid Providers, “PERM Error Charge Findings and Reviews,” 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 Info 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: Data on Companies’ Fiscal 12 months 2024 Estimates,” March 11, 2025.
E mail interviews with Tammie Smith and Craig Palosky, spokespersons for KFF, June 2, 2025.
E mail interview with Jennifer Wagner, director of Medicaid eligibility and enrollment on the Middle on Funds and Coverage Priorities.
E mail interview with Jessica Tillipman, affiliate dean for presidency procurement regulation at George Washington College’s regulation faculty, June 3, 2025.
E mail interview with Robert Westbrooks, Pandemic Response Accountability Committee govt 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 applications at KFF—an impartial supply of well being coverage analysis, polling, and journalism. Be taught extra about KFF.
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