Congressional Hearing Examines State Medicaid Fraud Oversight Amid Federal Pressure

On June 25, 2024, the House Energy and Commerce Subcommittee on Oversight and Investigations held a hearing titled “State Medicaid Program Integrity: Examining Fraud Risks and Oversight Deficiencies.” Chaired by Rep. Gary Palmer (R-AL) with Rep. Troy Balderson (R-OH) and Rep. Yvette Clarke (D-NY), the session featured Medicaid directors from New York, Ohio, California, and Minnesota, and Rep. Brett Guthrie (R-KY) questioned the state officials.

Congress Examines Medicaid Fraud Oversight Gaps

In May 2024, HHS Inspector General T. March Bell warned states of strict compliance for Medicaid Fraud Control Units; the Trump administration decertified Hawaii’s unit in early June, withholding $3 million. The DOJ sued New York over a $10 billion home-care contract on June 16. CMS paused $350 million to Minnesota, ordered all states in late April to “swiftly revalidate” high-risk providers, and reported that Medicaid’s budget exceeds $600 billion, serving roughly 75 million people, while California logged 26,000 audits in five years.

Congress Examines Medicaid Fraud Oversight Gaps

CMS Administrator Dr. Mehmet Oz said the Minnesota deferment “was intended to compel the state to propose corrective action.” Minnesota Director John Connolly said the state “hired a new inspector general with a decade-long record of prosecuting Medicaid fraud, increased his staff, and expanded prepayment review protocols to block payments to fraudulent providers on the front end.”

TND - The National Desk

Rep. Brett Guthrie pressed New York Director Bassiri and California Director Sadwith for not providing requested fraud data before the hearing, asking “Why have you been unable to provide that information to the committee?” Bassiri said transparency is “paramount” but could not commit, while Sadwith cited ongoing law-enforcement investigations that limited audit disclosures.

TND - The National Desk

The subcommittee noted that New York and California have yet to supply the full risk-level data requested, and the DOJ lawsuit against New York remains pending, leaving the scale of alleged fraud unverified.

Congress Examines Medicaid Fraud Oversight Gaps

• “March Bell sent letters to state attorneys general warning about strict compliance requirements for Medicaid Fraud Control Units.” — T. March Bell, HHS Inspector General

Congress Examines Medicaid Fraud Oversight Gaps

• “Last year, we hired a new inspector general with a decade-long record of prosecuting Medicaid fraud, and we have also increased his staff to enhance oversight and accountability,” — John Connolly, Minnesota State Medicaid Director

TND - The National Desk

• “Why have you been unable to provide that information to the committee?” — Rep. Brett Guthrie, Kentucky GOP Representative

TND - The National Desk

• “We agree that transparency is paramount. I can’t commit to that here, but I’m happy to take that back and get back to you as soon as I can.” — Amir Bassiri, New York State Medicaid Director

TND - The National Desk

The hearing continues the Committee’s oversight work on Medicaid fraud, and further oversight actions are expected as federal pressure on states persists.

Congress Examines Medicaid Fraud Oversight Gaps