“One out of each $5 or $6 in Medicaid [payments] 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 reduce 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 Funds, framed Medicaid as sagging underneath the load 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 should 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 cost charge is 16% to twenty%.
In a 2024 report overlaying the years 2022, 2023, and 2024, Medicaid’s father or mother 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 methodology and that the proportion may very well be as excessive as 25%. Different specialists informed PolitiFact that the precise numbers may very well be increased 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 intently associated Youngsters’s Well being Insurance coverage program gives 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 way of a mixture of federal and state cash and is run by states underneath 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 insurance packages 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% 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 cost charge figures had been unrealistically low for eight of the previous 10 years, as a result of in some years the company didn’t 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 cost 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 laborious to substantiate whether or not lack of eligibility auditing brought on increased improper cost 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 might assist clarify the upper charges in some years moderately than others. Utilizing two years of information to generalize about traits throughout a decade, she mentioned, shouldn’t 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 cost charges for Medicaid may very well 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 will not be 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 straight or not directly end in pointless prices to any well being care profit program. Examples of waste are conducting extreme workplace visits, prescribing extra medicines than crucial, and ordering extreme laboratory checks.”
- Abuse: “When well being care suppliers or suppliers carry out actions that straight or not directly end in pointless prices to any well being care profit program,” which may embody overbilling or misusing billing codes.
In contrast, 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 very good or service not obtained, and any cost that doesn’t account for credit score for relevant reductions,” KFF, a well being info nonprofit that features KFF Well being Information, wrote this 12 months.
“Though all fraudulent funds are improper, not all improper funds are fraudulent,” mentioned Jessica Tillipman, affiliate dean for presidency procurement legislation at George Washington College’s legislation 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 sometimes 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 may very well be an unintentional oversight or mistake.
In different phrases, it was uncommon for peculiar 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 cost 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 might 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 fact however ignores important info, specifically the federal authorities’s personal information. We charge the assertion Largely 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 Fee Findings and Reviews,” accessed June 4, 2025.
Facilities for Medicare & Medicaid Providers, “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: 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 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.
KFF Well being Information is a nationwide newsroom that produces in-depth journalism about well being points and is without doubt one of the core working packages at KFF—an unbiased supply of well being coverage analysis, polling, and journalism. Be taught extra about KFF.
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