\u201cOne out of every $5 or $6 in Medicaid [payments] is improper.\u201d<\/p>\n
Russell Vought<\/a> stated on June 1, 2025, in an interview on CNN\u2019s \u201cState of the Union.\u201d<\/p>\n Responding to charges that President Donald Trump\u2019s tax and spending bill would cut Medicaid coverage for millions of Americans, Trump administration officials misleadingly counter<\/a> that it targets only waste, fraud, and abuse.<\/p>\n During an interview on CNN\u2019s \u201cState of the Union,\u201d Russell Vought, the administration\u2019s director of the Office of Management and Budget, framed Medicaid as sagging under the weight of improper payments.<\/p>\n An \u201cimproper\u201d payment refers to payments made erroneously to beneficiaries and their providers or without sufficient documentation.<\/p>\n Pressed June 1<\/a> by CNN host Dana Bash about concerns that low-income Americans would suffer if the bill becomes law, Vought called such arguments \u201ctotally ridiculous.\u201d<\/p>\n \u201cThis bill will preserve and protect the programs, the social safety net, but it will make it much more commonsense,\u201d Vought said. \u201cLook, one out of every $5 or $6 in Medicaid [payments] is improper.\u201d<\/p>\n That would mean Medicaid\u2019s improper payment rate is 16% to 20%.<\/p>\n In a 2024 report covering the years 2022, 2023, and 2024, Medicaid\u2019s parent agency \u2014 the Centers for Medicare & Medicaid Services \u2014 said the rate was about 5.1%.<\/p>\n One conservative group, the Paragon Health Institute, said the agency has been using an incomplete calculation method and that the percentage could be as high as 25%. Other experts told PolitiFact that the actual numbers could be higher than what the federal government reports, although not as high as Paragon\u2019s estimate.<\/p>\n The White House did not respond to an inquiry for this article.<\/p>\n How High Is the Medicaid Improper Payment Rate?<\/strong><\/p>\n Medicaid and its closely related Children\u2019s Health Insurance program provides health care and long-term care<\/a> to roughly 83 million lower-income beneficiaries<\/a>, accounting for about one-fifth of health care spending overall. It is funded through a mix of federal and state money and is administered by states under federal government rules.<\/p>\n Every year, the Centers for Medicare & Medicaid Services publishes official numbers<\/a> for the share of improper Medicaid payments, and in other federal health insurance programs the agency oversees.<\/p>\n In a 2024 review of payments made<\/a> in 2022, 2023, and 2024, the agency found that 5.09% of Medicaid payments totaling $31.10 billion were improper.<\/p>\n The 5.09% rate represented a decrease from the 8.58% rate cited in its 2023 report, which was also based on a three-year time span. The 2024 figure represented the third consecutive<\/a> annual decline.<\/p>\n Are These Numbers Complete?<\/strong><\/p>\n In March 2025, Brian Blase, a conservative health policy analyst and president of Paragon Health, a health policy think tank, co-authored a report<\/a> that said the official CMS improper payment rate figures were unrealistically low for eight of the past 10 years, because in some years the agency failed to undergo widespread auditing of its beneficiaries\u2019 Medicaid eligibility.<\/p>\n From 2017 to 2019, during Trump\u2019s first term, Blase served as Trump\u2019s special assistant for economic policy. Before that, he served as a health policy analyst for the Senate Republican Policy Committee and has worked for the Heritage Foundation, a conservative think tank.<\/p>\n The report said if the agency\u2019s analysis had looked at eligibility checks every year, more ineligible beneficiaries and payments on their behalf would have been discovered. The report said this might have increased the improper payment rate as high as 25%, based on the rates found in 2020 and 2021, when a high number of eligibility checks were included in the agency\u2019s methodology.<\/p>\n However, it\u2019s hard to confirm whether lack of eligibility auditing caused higher improper payment rates in 2020 and 2021, said Jennifer Wagner, director of Medicaid eligibility and enrollment at the Center on Budget and Policy Priorities, a liberal think tank.<\/p>\n Wagner said Medicaid enrollment procedures have fluctuated, which could help explain the higher rates in some years rather than others. Using two years of data to generalize about trends across a decade, she said, is not necessarily valid.<\/p>\n Robert Westbrooks, the federal Pandemic Response Accountability Committee executive director who worked in government oversight roles during Democratic and Republican administrations, told PolitiFact it\u2019s plausible that the officially reported improper payment rates for Medicaid could be too low.<\/p>\n However, Westbrooks said pinpointing how much higher the rate is in reality is a speculative process. \u201cI don\u2019t believe anyone can credibly quantify the [difference],\u201d he said.<\/p>\n What Is an Improper Payment?<\/strong><\/p>\n Health care experts emphasized that improper payments are not the same thing as waste, fraud, or abuse.<\/p>\n CMS maintains official definitions<\/a> for these terms:<\/p>\n Fraud:<\/strong> \u201cWhen someone knowingly deceives, conceals, or misrepresents to obtain money or property from any health care benefit program.\u201d<\/p>\n Waste:<\/strong> \u201cOverusing services or other practices that directly or indirectly result in unnecessary costs to any health care benefit program. Examples of waste are conducting excessive office visits, prescribing more medications than necessary, and ordering excessive laboratory tests.\u201d<\/p>\n Abuse:<\/strong> \u201cWhen health care providers or suppliers perform actions that directly or indirectly result in unnecessary costs to any health care benefit program,\u201d which can include overbilling or misusing billing codes.<\/p>\n By contrast, an improper payment \u201cincludes any payment to an ineligible recipient, any payment for an ineligible good or service, any duplicate payment, any payment for a good or service not received, and any payment that does not account for credit for applicable discounts,\u201d KFF, a health information nonprofit that includes KFF Health News, wrote this year<\/a>.<\/p>\n \u201cAlthough all fraudulent payments are improper, not all improper payments are fraudulent,\u201d said Jessica Tillipman, associate dean for government procurement law at George Washington University\u2019s law school. \u201cMost providers identify the improper payments and return them knowing how aggressively enforced\u201d the legal provisions are. \u201cWhen they don\u2019t, they open the door to significant liability.\u201d<\/p>\n CMS said about 79% of improper payments happened when there was insufficient documentation<\/a>.<\/p>\n This typically involved cases in which a state or provider missed an administrative step, and it did not necessarily indicate fraud or abuse, the agency said. Instead, it could be an accidental oversight or mistake.<\/p>\n In other words, it was rare for ordinary beneficiaries to be scamming the government. \u201cThe vast majority of fraud in Medicaid is committed by providers or other actors, not enrollees,\u201d Wagner said.<\/p>\n Our Ruling<\/strong><\/p>\n Vought said that \u201cone out of every $5 or $6 in Medicaid [payments] is improper.\u201d<\/p>\n The official improper payment rate calculated by the Centers for Medicare & Medicaid Services in 2024 was about 5%, smaller than the 16% to 20% rate Vought described.<\/p>\n A health policy analyst and former Trump adviser said methodological shortcomings in the agency\u2019s analysis could mean the rate is as high as 25%. Although it\u2019s possible the rate is higher than the 5% the government reported, how much higher is speculative.<\/p>\n The statement contains an element of truth but ignores critical facts, namely the federal government\u2019s own data. We rate the statement Mostly False.<\/p>\n Russell Vought, interview with CNN\u2019s \u201cState of the Union<\/a>,\u201d June 1, 2025.<\/p>\n Centers for Medicare & Medicaid Services, \u201cFiscal Year 2024 Improper Payments Fact Sheet<\/a>,\u201d Nov. 15, 2024.<\/p>\n Centers for Medicare & Medicaid Services, \u201cPERM Error Rate Findings and Reports<\/a>,\u201d accessed June 4, 2025.<\/p>\n Centers for Medicare & Medicaid Services, \u201c2024 Medicaid & CHIP Supplemental Improper Payment Data<\/a>,\u201d accessed June 4, 2025.<\/p>\n Paymentaccuracy.gov, \u201cAnnual Improper Payments Datasets<\/a>,\u201d accessed June 3, 2025.<\/p>\n KFF, \u201c5 Key Facts About Medicaid Program Integrity \u2014 Fraud, Waste, Abuse and Improper Payments<\/a>,\u201d March 18, 2025.<\/p>\n KFF, \u201cVirtual Event Transcript \u2014 The Health Wonk Shop: Understanding Fraud and Abuse in Medicaid<\/a>,\u201d April 24, 2025.<\/p>\n Paragon Health Institute, \u201cMedicaid\u2019s True Improper Payments Double Those Reported by CMS<\/a>,\u201d March 3, 2025.<\/p>\n Government Accountability Office, \u201cImproper Payments: Information on Agencies\u2019 Fiscal Year 2024 Estimates<\/a>,\u201d March 11, 2025.<\/p>\n Email interviews with Tammie Smith and Craig Palosky, spokespersons for KFF, June 2, 2025.<\/p>\n Email interview with Jennifer Wagner, director of Medicaid eligibility and enrollment at the Center on Budget and Policy Priorities.<\/p>\n Email interview with Jessica Tillipman, associate dean for government procurement law at George Washington University\u2019s law school, June 3, 2025.<\/p>\n Email interview with Robert Westbrooks, Pandemic Response Accountability Committee executive director who worked in government oversight roles during Democratic and Republican administrations, June 3, 2025.<\/p>\n KFF Health News<\/a> is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF\u2014an independent source of health policy research, polling, and journalism. Learn more about KFF<\/a>.<\/p>\nOur Sources<\/h4>\n
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