There is a reason billions of taxpayer dollars have been flowing out of state Medicaid programs to dead people, inactive providers, and outright scammers. It turns out the office responsible for catching that kind of fraud was quietly stripped down to almost nothing during the Biden administration, and Americans are only now learning the full extent of it.
Health and Human Services Secretary Robert F. Kennedy Jr. revealed the number during a press conference this week, and it is jaw dropping. When Xavier Becerra took over as HHS Secretary under President Biden, the program integrity office charged with guarding against fraud across all fifty states and five territories had 80 people on staff. By the time Kennedy walked into the building to take over the department, that number had collapsed to just six.
Read that again. Six people. Six individuals were left responsible for overseeing program integrity for the entire national Medicaid system, a program that spends hundreds of billions of taxpayer dollars every single year across every state in the country. Seventy four positions, nearly the entire office, had simply vanished under Becerra’s watch.
Kennedy did not hold back in describing what that staffing collapse actually meant in practice. He explained that even when the skeleton crew that remained suspected fraud, the Biden HHS sent the checks out anyway and only tried to claw the money back after the fact. As Kennedy put it, that approach did not make sense and it did not work. The scammers got paid, and the taxpayers got stuck footing the bill.
Anyone who has followed government fraud enforcement knows why that clawback approach fails. Once fraudulent money is out the door, it is often gone. Shell companies dissolve, individuals disappear, and recovery rates on already disbursed fraudulent payments are notoriously low. An office with six people trying to police a national program of this size was never going to be able to catch problems before the money moved. It was set up to fail from the start, whether by design or by neglect.
This is not an isolated data point either. It fits into a much larger pattern of oversight erosion during the Biden years that has only become fully visible now that the current administration has started digging through the numbers. Watchdog groups have long tracked how difficult it is to even measure fraud in Medicaid with precision, in part because there has never been a reliable national mechanism for identifying it in real time. A gutted program integrity office makes that problem dramatically worse.
The consequences of this staffing collapse are now playing out in state after state. Minnesota, for example, has become something of a cautionary tale. State officials there were forced to terminate more than 18,000 inactive provider agencies between October of last year and this past spring as part of a corrective action plan with federal regulators, none of which had billed Medicaid in the past year. That kind of bloat does not happen overnight. It builds up over years of insufficient oversight, exactly the kind of oversight that a fully staffed program integrity office is supposed to provide.
California tells a similar story. State auditors have acknowledged suspending roughly 5,000 providers for fraud concerns over the past five years, a number that sounds proactive until you consider how much fraud federal investigators are now uncovering that state officials apparently missed. When the cop on the beat at the federal level has been reduced to a handful of overworked employees, it should surprise no one that fraud metastasized at the state level with far too little pushback.
New York offers perhaps the starkest example yet of what happens when oversight breaks down. HHS’s own Office of Inspector General formally denied recertification of New York’s Medicaid Fraud Control Unit this month, a unit that receives roughly 60 million taxpayer dollars every year and employs more than 270 staff. Despite that massive budget and headcount, federal auditors found New York’s unit had repeatedly produced the lowest levels of criminal Medicaid fraud enforcement among all the large states in the country. Money and manpower without accountability produced almost nothing.
Hawaii’s fraud control unit met the same fate, losing its federal certification and funding after failing to meet basic performance standards. Eight additional states received only conditional recertification, meaning federal auditors found enough problems to put them on notice as well. This is not a partisan witch hunt targeting one or two states Kennedy happens to dislike. This is a systemic pattern of state level fraud enforcement units that simply were not doing their jobs, operating for years with minimal federal pressure to improve.
The current administration has responded by launching what it calls a full scale war on fraud, standing up a new National Fraud Enforcement Division at the Department of Justice along with a dedicated Presidential Task Force focused on eliminating fraud across federally funded programs. Regional strike forces have also been created specifically to investigate healthcare fraud, giving federal agents dedicated resources to chase down bad actors rather than relying on a handful of overwhelmed program integrity staffers in Washington.
It is worth pausing on just how much money was potentially exposed to fraud during the years the program integrity office sat gutted. Medicaid is a massive program, and even a small percentage of fraudulent billing across a system that large can translate into billions of dollars in losses annually. With only six people nationally responsible for catching that fraud, the honest answer is that nobody really knows how much slipped through during that stretch, because there was no functional apparatus left to find out.
Defenders of the previous administration might argue that staffing cuts were simply part of broader government efficiency efforts, or that state level Medicaid Fraud Control Units were supposed to pick up the slack. But the New York example undercuts that argument entirely. New York’s unit had ample staff and ample funding, and it still produced some of the weakest fraud enforcement results in the entire country. Staffing alone was never the only issue. A lack of accountability from the top down was just as much to blame.
Kennedy’s decision to expose these numbers publicly matters because it reframes the current fights over Medicaid funding freezes in California and Minnesota in their proper context. Critics have accused the administration of playing political games by targeting Democrat led states. But when you understand that the federal fraud detection apparatus was allowed to atrophy down to six employees under the last administration, the current crackdown looks less like political targeting and more like a long overdue course correction.
It also raises uncomfortable questions about who exactly was making decisions to slash program integrity staffing while the program itself continued to grow in cost and enrollment. Cutting the people responsible for guarding against fraud while expanding the program those people were supposed to oversee is not a formula anyone serious about fiscal responsibility would choose. Yet that is precisely what happened.
The rebuilding effort underway now involves more than just adding staff back. Kennedy and CMS Administrator Dr. Mehmet Oz have both pointed to a new emphasis on artificial intelligence and advanced data analytics as tools to help catch fraudulent claims before payments go out the door, rather than trying to recover stolen money after the fact. That represents a philosophical shift away from the reactive posture that defined fraud enforcement, or the lack of it, under the previous administration.
None of this fixes the years of lost oversight in a single press conference or a single policy memo. Rebuilding institutional capacity within a federal office takes time, expertise, and sustained political will. But simply exposing what happened, that a program integrity office meant to protect hundreds of billions of taxpayer dollars was allowed to shrink to just six people, is an important first step toward restoring public confidence in how these programs are run.
Taxpayers deserve to know how their money was managed during those years, and they deserve an honest accounting of why an office with such a critical mission was allowed to collapse so dramatically. Kennedy’s willingness to put a specific number on the record, eighty people down to six, gives the public something concrete to judge the previous administration’s stewardship by, rather than vague assurances that everything was under control.
