“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 minimize 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 underneath the load of improper funds.
An “improper” fee refers to funds made erroneously to beneficiaries and their suppliers or with out adequate documentation.
Pressed June 1 by CNN host Dana Bash about considerations that low-income People would endure if the invoice turns into regulation, Vought referred to as such arguments “completely ridiculous.”
“This invoice will protect and defend the applications, the social security internet, however it’ll make it rather more commonsense,” Vought mentioned. “Look, one out of each $5 or $6 in Medicaid [payments] is improper.”
That will imply Medicaid’s improper fee fee is 16% to twenty%.
In a 2024 report protecting the years 2022, 2023, and 2024, Medicaid’s mother or father company — the Facilities for Medicare & Medicaid Companies — mentioned the speed was about 5.1%.
One conservative group, the Paragon Well being Institute, mentioned the company has been utilizing an incomplete calculation methodology and that the proportion might be as excessive as 25%. Different specialists informed PolitiFact that the precise numbers might be increased than what the federal authorities experiences, 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 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 total. It’s funded by means of a mixture of federal and state cash and is run by states underneath 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 applications 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 had been improper.
The 5.09% fee represented a lower from the 8.58% fee 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 assume tank, co-authored a report that mentioned the official CMS improper fee fee 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 assume 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 might need elevated the improper fee fee 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.
Nevertheless, it’s laborious to substantiate whether or not lack of eligibility auditing induced increased improper fee charges in 2020 and 2021, mentioned Jennifer Wagner, director of Medicaid eligibility and enrollment on the Middle on Finances and Coverage Priorities, a liberal assume tank.
Wagner mentioned Medicaid enrollment procedures have fluctuated, which may assist clarify the upper charges in some years relatively than others. Utilizing two years of information to generalize about traits throughout a decade, she mentioned, will not be 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 fee charges for Medicaid might be too low.
Nevertheless, Westbrooks mentioned 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 mentioned.
What Is an Improper Cost?
Well being care specialists emphasised that improper funds usually are 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 providers 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 drugs than vital, and ordering extreme laboratory checks.”
- 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 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 acquired, 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 college. “Most suppliers establish the improper funds and return them realizing how aggressively enforced” the authorized provisions are. “After they don’t, they open the door to important 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 might be an unintended oversight or mistake.
In different phrases, it was uncommon for atypical 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 fee calculated by the Facilities for Medicare & Medicaid Companies in 2024 was about 5%, smaller than the 16% to twenty% fee 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 doable the speed is increased than the 5% the federal government reported, how a lot increased is speculative.
The assertion comprises a component of reality however ignores crucial information, specifically the federal authorities’s personal information. We fee 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 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.
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 Finances and Coverage Priorities.
E mail interview with Jessica Tillipman, affiliate dean for presidency procurement regulation at George Washington College’s regulation 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.
KFF Well being Information is a nationwide newsroom that produces in-depth journalism about well being points and is likely one of the core working applications at KFF—an unbiased supply of well being coverage analysis, polling, and journalism. Be taught extra about KFF.
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