“One out of each $5 or $6 in Medicaid (funds) is improper.”
Russell Vought said on June 1, 2025, in an interview on CNN’s “State of the Union.”
Responding to expenses that President Donald Trump’s tax and spending invoice would minimize Medicaid protection for tens of millions 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 Price range, 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 ample documentation.
Pressed June 1 by CNN host Dana Bash about considerations that low-income Individuals would undergo if the invoice turns into legislation, Vought known as such arguments “completely ridiculous.”
“This invoice will protect and shield the packages, the social security internet, however it’s going to make it far more commonsense,” Vought stated. “Look, one out of each $5 or $6 in Medicaid (funds) is improper.”
That will imply Medicaid’s improper cost price is 16% to twenty%.
In a 2024 report overlaying the years 2022, 2023, and 2024, Medicaid’s dad or mum company — the Facilities for Medicare & Medicaid Companies — 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 could possibly be as excessive as 25%. Different consultants instructed PolitiFact that the precise numbers could possibly be larger than what the federal authorities stories, 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 Cost Fee?
Medicaid and its carefully associated Kids’s Well being Insurance coverage program supplies well being care and long-term care to roughly 83 million lower-income beneficiariesaccounting 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 beneath federal authorities guidelines.
Yearly, the Facilities for Medicare & Medicaid Companies publishes official numbers for the share of improper Medicaid funds, and in different federal medical insurance packages 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% price represented a lower from the 8.58% price 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 price figures had 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 price as excessive as 25%, primarily based on the charges present in 2020 and 2021, when a excessive variety of eligibility checks had been included within the company’s methodology.
Nonetheless, it’s onerous to substantiate whether or not lack of eligibility auditing brought about larger improper cost charges in 2020 and 2021, stated Jennifer Wagner, director of Medicaid eligibility and enrollment on the Middle on Price range and Coverage Priorities, a liberal suppose tank.
Wagner stated Medicaid enrollment procedures have fluctuated, which may assist clarify the upper charges in some years somewhat than others. Utilizing two years of knowledge to generalize about developments throughout a decade, she stated, isn’t essentially legitimate.
Robert Westbrooks, the federal Pandemic Response Accountability Committee government director who labored in authorities oversight roles throughout Democratic and Republican administrations, instructed PolitiFact it’s believable that the formally reported improper cost charges for Medicaid could possibly be too low.
Nonetheless, Westbrooks stated pinpointing how a lot larger the speed is in actuality is a speculative course of. “I don’t consider anybody can credibly quantify the (distinction),” he stated.
What Is an Improper Cost?
Well being care consultants emphasised that improper funds are usually 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 immediately or not directly lead to pointless prices to any well being care profit program. Examples of waste are conducting extreme workplace visits, prescribing extra medicines than mandatory, and ordering extreme laboratory exams.”
- Abuse: “When well being care suppliers or suppliers carry out actions that immediately or not directly lead to pointless prices to any well being care profit program,” which might embody overbilling or misusing billing codes.
Against this, an improper cost “contains 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 legislation at George Washington College’s legislation college. “Most suppliers determine the improper funds and return them understanding how aggressively enforced” the authorized provisions are. “Once they don’t, they open the door to vital legal responsibility.”
CMS stated about 79% of improper funds occurred when there was inadequate documentation.
This usually concerned circumstances by 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 could possibly be an unintended oversight or mistake.
In different phrases, it was uncommon for odd 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 (funds) is improper.”
The official improper cost price calculated by the Facilities for Medicare & Medicaid Companies in 2024 was about 5%, smaller than the 16% to twenty% price Vought described.
A well being coverage analyst and former Trump adviser stated methodological shortcomings within the company’s evaluation may imply the speed is as excessive as 25%. Though it’s doable the speed is larger than the 5% the federal government reported, how a lot larger is speculative.
The assertion incorporates a component of reality however ignores essential info, specifically the federal authorities’s personal information. We price the assertion Largely False.
Our Sources
Russell Vought, interview with CNN’s “State of the Union,” June 1, 2025.
Facilities for Medicare & Medicaid Companies, “Fiscal Yr 2024 Improper Funds Truth Sheet,” Nov. 15, 2024.
Facilities for Medicare & Medicaid Companies, “PERM Error Fee Findings and Studies,” accessed June 4, 2025.
Facilities for Medicare & Medicaid Companies, “2024 Medicaid & CHIP Supplemental Improper Cost Knowledge,” accessed June 4, 2025.
Paymentaccuracy.gov, “Annual Improper Funds Datasets,” accessed June 3, 2025.
KFF, ”5 Key Details 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.
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 Price range and Coverage Priorities.
E mail interview with Jessica Tillipman, affiliate dean for presidency procurement legislation at George Washington College’s legislation college, June 3, 2025.
E 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.
