States Weigh In on Medicaid Fraud

Dan Gorenstein: The Trump administration has made fighting fraud one of its top health care priorities. 

Donald Trump: I am officially announcing the War on Fraud to be led by our great Vice President, JD Vance.

JD Vance: We are going to turn off that anti-fraud money and if we continue to find problems, we can turn off other resources within their state medicaid programs, as well.

Dan Gorenstein: Medicaid has been a particular focus.

Federal officials argue that states are not doing enough to protect the government health insurance program for low-income and disabled Americans from bad actors.

Mehmet Oz: The President has gotten really upset about some of the numbers he’s seeing for predicted fraud, which we think could be about $100 billion in this country.

Dan Gorenstein: Some states and health policy experts say that Medicaid fraud is a much smaller problem than the administration claims, and that what the feds are doing threatens the care of vulnerable people.

Tradeoffs co-hosted a virtual event about the Medicaid fraud with the Leonard Davis Institute of Health Economics at the University of Pennsylvania. 

I moderated a conversation with three state Medicaid officials to push past the political talking points and understand the state perspective on all the anti-fraud energy coming out of Washington. 

Today, a special live edition of Tradeoffs. 

From the studio at the Leonard Davis Institute at the University of Pennsylvania, I’m Dan Gorenstein. This is Tradeoffs.

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Andrew Parella: The following conversation was recorded live on September 17, 2026, and has been edited lightly for length, clarity and sound quality.

Dan Gorenstein: Hi, everybody. Thank you so much for being here today. My name is Dan Gorenstein. I’m the founder and executive editor of Tradeoffs. Tradeoffs is a nonprofit news organization that covers healthcare’s toughest choices. We produce a weekly podcast called Tradeoffs, which you can get wherever you listen to your podcasts.

There have been a lot of fast and furious changes in healthcare over the last year and a half, and it can be hard to make sense of it all. That’s why we’ve partnered with our friends at the Leonard Davis Institute of Health Economics at the University of Pennsylvania for a series of conversations called Decoding the Moment.

Paula Chatterjee (PC): Hi, everyone. I’m Paula Chatterjee, I’m a senior fellow at LDI. LDI is Penn’s hub for research on healthcare delivery, health policy, and population health. LDI brings together more than 500 researchers who are national experts and thought leaders on health and health care. And so this conversation is a partnership between LDI and Tradeoffs to really create a space where you all can better understand what’s happening in Washington and what it could mean for the future. So today, we’re taking a closer look at the Trump administration’s aggressive push to combat fraud in Medicaid.

Dan Gorenstein: Medicaid, as many of you know, is the $930 billion health insurance program, which covers some 73 million low income and disabled Americans. It is jointly funded by states and the federal government. And the Trump administration argues that there’s widespread fraud in the program, wasting billions in taxpayer dollars.

PC: And to that end, federal officials have frozen billions of dollars in Medicaid payments. They’ve revoked federal funding of anti-fraud units in several states, and they’ve started to demand that all states recheck the credentials on large groups of certain Medicaid providers.

Critics agree that there’s fraud in Medicaid, but they argue that it’s often at the margins and are painting this anti-fraud work as potentially a little politically motivated. Supporters consider this crackdown long overdue and part of a broader strategy to tackle high health care costs.

Dan Gorenstein: Either way, the administration is pushing states to do more, much more to root out fraud in Medicaid. So we wanted to take some time to understand how states are looking at this. We’re joined today by Medicaid leaders from three states who have been on the front lines of combating fraud for years.

We would love for you to engage with each other in the chat. We hope that part of what we can do through these events is help you all connect and learn from each other, not just the people who are participating in the virtual panel. So to instigate that, please jump in, introduce yourself. Maybe what you’re hoping to learn from today. While you do that, I’m going to turn this back over to you, Paula, to get us started with three big numbers to frame this conversation.

PC: Thanks so much, Dan. So I would love it if my first big number could be how much fraud there is in Medicaid. And we had so many people ask for that in the registration. Again, thank you so much for the, the questions and the comments.

But that number is actually really hard to pin down. And that’s mostly because we only know about the fraud that is discovered. So instead, what we’ve done today is we’ve put together a few numbers to try and explain the broader context and level set a little bit on what numbers could look like in this area. So with that, we’re going to put the numbers up on the screen in just a moment.

But my first number for you today is going to be $2 billion. That makes up about 0.2% of Medicaid spending. That $2 billion is how much Medicaid spending was recovered by state Medicaid fraud control units through convictions and settlements in the year 2025. Each state has a Medicaid Fraud Control Unit or a MFCU, which prosecutes cases. And today, we’re really lucky you’ll be hearing from the head of the Massachusetts MFCU shortly. Now, this money that I’ve put in this number comes from provider fraud. It does not come from beneficiary fraud. So for example, it includes clinicians or home health agencies who might be billing Medicaid for care that they never provided.

It does not include someone who might be misstating their income to access Medicaid. That type of beneficiary fraud is actually quite rare. The latest federal government report included no beneficiary fraud of that sort. So we can think of this $2 billion as maybe a potential lower bound of the Medicaid fraud estimate. The cases that are actually discovered, brought to court and delivered some sort of penalty.

Now, as a researcher, I would love to give you an upper bound here, but we don’t actually have a good one. Instead, what I will give you for my next number is a big number that gets talked about a lot in this conversation about fraud in the Medicaid program. That second number is $37 billion, or 6% of federal Medicaid spending. That is not actually a fraud number. That’s one of the main things that we’re hoping you take away from, you know, these three numbers we’re going to give you.

That number, 37 billion, is the amount of federal Medicaid spending that CMS estimated as something called improper payments in the Medicaid program across all states in 2025. Improper payments are when Medicaid pays too much, too little, or there’s some sort of missing information going on in the payment process. CMS says that three quarters of those improper payments are the result of documentation, right? Insufficient documentation.

As a clinician, oh man, this rings real to me. And CMS says that insufficient documentation not really indicative of fraud and abuse. And so that’s why this number is not really considered a fraud number. But it does come up a lot in this conversation, which is why we wanted to include it today.

Another small piece of context. 37 billion, 6% of federal Medicaid spending. That’s actually the same 6% as the rate of the improper payment rate in Medicare. So just if you’re interested in benchmarking, we wanted to offer that. The last number gives us a snapshot of the Trump administration’s recent anti-fraud actions. And that number is $2.5 billion. That’s how much money CMS has temporarily refused to pay out to California and Minnesota over fraud concerns in those states.

These are called deferrals, right? Deferrals are a normal but relatively rare tool that the Centers for Medicare and Medicaid Services can use to basically hit pause on paying the federal share of Medicaid payment if they have concerns. Now, these are the largest deferrals ever from CMS, which federal officials say are warranted, in part because of significant growth that they’re noticing in states and how much they’re spending on in-home care programs. Other folks are saying that these deferrals are more politically motivated and could jeopardize the availability of really important services and care that people need.

Dan Gorenstein: Paula, thank you so much. Really appreciate that context. It’s really going to set us up quite well. I invite the panelists to turn their cameras on now. And with this clearer sense of how much fraud might be in Medicaid and a snapshot of the unprecedented actions the administration is taking against states, we’re going to bring in these three folks. And I’m really excited to have Kevin, Drew, and Amir with us. We’ve had a few prep calls ahead of this, and these guys have so much experience in this world and a lot of nuanced, thoughtful takes on what has become a very charged and politicized conversation. I’d like you all to introduce yourselves. Amir, can you please begin?

Amir Bassiri (AB): Absolutely. And thank you. Great to be here. My name is Amir Bassiri. I’m the Medicaid director in New York. I’ve been in this role for about four years, but been with the program for about a decade.

Dan Gorenstein: Kevin.

Kevin Lownds (KL): Good afternoon. Thanks for having me. I’m Kevin Lowdes. I am the chief of the Massachusetts Medicaid Fraud Control Unit. I’ve been in this role for a little under two years, but I have been with the unit for about ten years previously serving as the deputy director.

Dan Gorenstein: And Drew.

Drew Gonshorowski: And thank you for having me, Dan. I’m Drew Gonshorowski. I’m the former [Medicaid] director of the state of Nebraska, and I was there for about two years. And now I’m a senior fellow at the Fiscal Lab on Capitol Hill. Really happy to be here.

Dan Gorenstein: Thank you all again very much for being here. We are really excited for you all to really help us understand this incredibly important debate that does get kicked around, and I think is more often understood in political terms than in policy terms and in human terms, in financial terms. So I’m hoping that we’re going to be able to have a very deep, meaningful conversation this afternoon.

Kevin, I’d like to start with you and have you give us a couple of brief examples of cases that you’ve worked on that represent the most common types of fraud that we see in Medicaid. Just give us some definitions here.

KL: Sure, I’ll start with two examples. And these examples, I think I’m going to aim to the poles of different types of fraud. So the first and the first pole, which I think is like the hardcore criminal fraud.

I’ll give you an example. I prosecuted personally a home health care agency here in Boston where  the owner of the home health agency and her husband had stolen a number of patient Medicaid IDs from a legitimate healthcare company. They then use those IDs to bill for all sorts of services that were never provided.

When we interviewed the patients, they had never heard of the company. When we interviewed the doctors who had purportedly signed authorization for those services, they had never heard of the company. When we looked at the records, they showed the owner of the company, who was a nurse herself, providing services to patients in places like Lowell and Boston and Lynn, Massachusetts. When we looked at her border crossing records, they showed her in places like Vegas and Paris and Dubai.

We alleged, and eventually proved successfully at trial, that she stole more than $3 million from the Medicaid program. And we also were able to show where she spent it, including one day alone, where she bought more than $550,000 of merchandise from Christian Dior in Paris at the same time that she was purportedly providing services in Massachusetts. So that is egregious healthcare fraud, right? The services were never provided. The patients had never heard of it. It was prosecuted criminally. And she went to prison. Right. That’s pole one.

Dan Gorenstein: And real quick, real quick, pole one really is this reflection of like straight up stone cold criminal activity. Paris is not Lowell like.

KL: Yes, yes, 100% Dan. You know, here in Massachusetts, we refer to it as Florida style fraud because we don’t often see things like that.

Dan Gorenstein: Sorry for the Florida people on the call here, okay.

KL: Shout out to my friends at the Florida MFCU. But nevertheless, so I would like to talk about another example that I was actually prosecuting at the same time, which is why it sticks in my mind.

The second largest behavioral health clinic in Massachusetts was what we alleged and we learned from a whistleblower was providing supervision to unlicensed clinicians, unlicensed behavioral health clinicians, which Medicaid allows, but they were providing that supervision through similarly unlicensed clinicians. That is not allowed under the Medicaid rules. Were the services rendered? Yes. Were the patients receiving services from therapists who were allowed to provide those services? Yes. But on the back end was a MassHealth regulation, which is our name for our Medicaid program, which requires supervision of those clinicians.

Was that complied with? The answer is no. Did they know about it? We believe yes. There were meetings that we were told about where actually the regulations were passed around and highlighted. And they said, see, this is the part about supervision. We’re not doing this right. And there was a private equity firm that purchased that company. They became aware of the issues, or so we alleged. And they did not correct those issues. That is, in my view, also fraud. Is it the same type of fraud that we talk about with a company that truly did not actually provide any services to people? No. Was it prosecuted differently? Yes, we prosecuted it civilly.

We brought the case in federal court, and we ultimately recovered $29 million for the Medicaid program through that action, $25 million of which was provided by the former founder and the private equity firm. Those, now, that is another example of healthcare fraud. It’s a different type, and I think it is a less common public conception of what fraud looks like. But it is another example of the type of fraud that in my day to day, we see all the time.

Dan Gorenstein: Fascinating. Thank you so much. I really feel like you’re just pulling the curtain back for me so much here. And can you give us, some context? So we’ve got on the one hand, what I was calling stone cold criminal activity. How would you just what’s a catch phrase to categorise this second type.

KL: I would call it civil fraud, right? It’s a fraud that may not rise to the level of criminal intent. It is a scheme that may not result in sort of no services being provided to vulnerable patients, but it is nonetheless regulatory non-compliance and known to be regulatory non-compliance. And when that happens, we would consider that to be civil fraud.

Dan Gorenstein: One final question here. Which is more common. If you had to kind of yeah, I don’t know if there’s data or evidence around this, but and if there is, please cite that. But if not, you know, back of the envelope.

KL: So Dan, what I’d say, and I think it varies state to state. I didn’t mean to throw strays at Florida, but honestly, you know, it might be different in Florida versus Massachusetts. In Massachusetts, we have about a 50/50 balance in my unit between criminal and civil fraud actions, which I think is a reasonable barometer. I think the type of example that I gave with the Home Health Agency is less common than the type of example I gave with the regulatory non-compliance. But there are things that fall in between these spectrums, and I would bet that the hardcore criminal fraud is a smaller percentage than the regulatory non-compliance version in Massachusetts.

Dan Gorenstein: In Massachusetts. Very good. Thank you so much for that, Kevin. Those are some really nice examples of the types of cases that you see. But a lot has to happen before someone in your role, MFCU. So fun to say. And do you, you must feel like pretty cool to be able to like, say that at parties.

KL: People always think I’m swearing at them, which sometimes I am honestly so.

Dan Gorenstein: Muriel Fernandez wants to better understand the first line response from states. Amir, Drew, can you each give me an example that captures the type of anti-fraud work that happens inside a state Medicaid agency where you all have worked? Drew, let’s start with you.

Drew Gonshorowski: Yeah, and that’s absolutely a great question because I think it does sort of highlight some of the integral work that happens behind the scenes in Medicaid programs and in the state of Nebraska. A lot of that work did precipitate off of data analysis, trying to understand, obviously, if there was anything that was anomalous across different service lines so that we could actually say, hey, this might need some extra, an extra look. There might be, you know, an intent behind why this looks so different across different provider groups and that would, you know, sort of build the case to send over to our counterpart to Kevin in the state.

There was also a lot of work to on the front end when we were building policy, where our view was that it was very important to include systems and policy in the room with our, you know, people that were investigating fraud, waste and abuse in the state. So this meant, you know, as we’re building different policies, they would they would effectively provide some input. One example in the state that I think came out through, through some of the work that we’ll probably talk about a little later in this on, on autism services was that, you know, very simple example, right? Where across two different types of service delivery, you know, a one on one session with a child and a group session.

Nebraska had set the rate for that code at the same level. So it was the exact same price, whether you for each kid, whether you saw them one on one at one time or everybody in the room at the same time. And you can think through that, that that creates a behavioral response from a provider that might not necessarily rise to the level of fraud, but could create an incentive to say, okay, I didn’t have certain levels of staff show up today. I can put everybody in a group, and then still get the same rate.

We did notice that that behavior did exist when we corrected that rate. And the punchline was that people sort of migrated away from that sort of group rate, over time as that was, was fixed. And that was something that was brought by program integrity investigators first with policy. So having them in the room to talk about how you build that ship, how you test against clinical best practice and appropriateness is really important.

Dan Gorenstein: So, and before we get to you, Amir here, just, just want to spend a second more with you, Drew. Program integrity investigators, I think this is new for certainly for me, I would guess for many of the people in our audience. So what you’re saying when you talk about when you talk inside the Medicaid office, right, when you’re talking about fraud, the kind of fraud that you come across is less these sort of almost like, you know, both of Kevin’s examples, I might call like scandalous, right? You’re coming across stuff that’s maybe a little less scandalous, but more around program integrity, best practices, sort of putting your thumb on the scale a little bit kind of kinds of behavior from providers. Is that what you’re talking about?

Drew Gonshorowski: Yeah. And I think Kevin’s second example around sort of a provider making a conscious decision to not provide supervision just gives a great lens into that kind of work, right? It’s about how the services are delivered, whether or not the services are delivered in line with the state regulations, but then also trying to get an idea into whether there was intent behind sort of that miss in the mark on regulations versus, you know, some opportunity to improve practice.

One example I like to give in this space too is around the idea on whether or not you should sign your documentation. So in Nebraska, there was sort of this full throated back and forth, and it actually led to some sort of state legislature on whether or not signing documentation is a clerical error. So if it’s just an oopsie, and my personal belief, and I think the belief of anyone that is a regulator in this space is you can’t really sort of have flexibility around whether or not sign documentation is is an oopsie or not. It has to be signed.

And what this does is it creates a record that the clinician says, okay, this is this, this is my documentation, and it puts a time stamp on it that they are done. When investigators come in, they can make sort of a case around intent. They can say, okay, this person came in after they had signed their documentation, when they knew we were auditing them and changed things. And they know that they put their legal binding name on that, right? So there is all these different examples where it comes into more how, how they’re operating their their business that might not rise to that salacious, really crazy news story around fraud. But but it’s still integral work to maintaining sustainability of our services.

Dan Gorenstein: Thanks so much, Drew. How about you, Amir? What’s a nice example of the kind of anti-fraud work that you all are doing inside the office?

AB: Yeah, thanks, Dan. It’s actually going to build off of Drew’s example. And in our office, akin to what drew shared, a lot of the focus is on identification, prevention, monitoring and, recovery where appropriate, but it’s less our work stops in the determination of what a credible allegation of fraud is. And Kevin and our counterpart of Kevin makes that determination.

But we use dashboards, we look at data on a category of service specific basis and try and stratify to what are referred to as high risk areas. High risk areas, some of them are defined by the federal government or Medicare does define high risk categories. We mimic those, but we have also been adding other focus areas just given what was described earlier with the growth in Medicaid spending and some of the focus on home and community based services.

But my example, like Drew, is in the advanced behavioral analyst space and is somewhat akin to Kevin’s as well. When, you know, there were a lot of concerns with access and availability of ABA services a few years ago. And legislators, policy makers expanded that access, and workforce was a big component of that.

Dan Gorenstein: And sorry, real quick, excuse me for interrupting Amir, You said ADA?

AB: ABA. It’s what Kevin mentioned in his second example. It’s what Drew highlighted in his example of state Medicaid agency. But the long story short is because of some of the concerns that were not as empirical, we allowed for both licensed and unlicensed ABA workers to provide ABA services, as Kevin said, on licenses under the supervision of a licensed practitioner. But what we saw after that took effect was all of the utilization, spending and billing happened to be in unlicensed workers who were paid at the equivalent rate of a licensed worker.

So that policy decision the state made or legislators made. We started monitoring, observing, and became very concerned about where that growth was occurring. When we looked at the billing units, who was submitting claims and then who’s receiving them? Who’s the Medicaid beneficiary receiving them? We started becoming incredibly concerned because in effect, the number of claims is going up, the number of units is going up. The number of people receiving the services is the same. And so that’s really where we try to do it through a data and analytics focus. But in terms of the enforcement side, we work with our counterparts like Kevin.

Dan Gorenstein: And so I’m sure I’m following you here. One of the ways this man, this anti-fraud work manifests itself for you in New York State is you’re watching numbers. Are they going up? Are they going down? Are we seeing anomalies? And if we’re seeing anomalies, let’s begin. That’s the leading indicator to begin to ask questions. Begin in some sort of investigation.

AB: From our perspective as part of our role in preventing fraud, waste and abuse, yes. And looking at outliers, looking at data, doing retrospective analysis, trying to make evidence based policy.

Dan Gorenstein: Very good. Thank you. Thank you all so much. So another important player here are the Medicaid managed care plans. These are the private health insurance companies that states contract with to provide Medicaid coverage for some seven in ten beneficiaries nationwide. Matthew Zahn wants to know about their role in fighting fraud. Kevin, let’s start with you. How are these these managed care plans doing?

KL: Yeah. So they play an important role. And it’s a partnership role, right? So in the managed care organizations often have their own units that are dedicated to collecting overpayments and identifying fraud or waste and abuse within that managed care plans network.

It is super important to our efforts that those managed care plans successfully report their findings to both the Medicaid agency and, when appropriate to us, and they are legally required to refer all cases of potential fraud to Medicaid fraud control units. It’s very important for us to have that relationship.

And so in Massachusetts, I meet with every managed care entity every three to six months, and we sit down and we talk about trends. These are things I’m seeing. These are things they’re seeing, you know, as a mirror. We’re all talking about ABA already.

Dan Gorenstein: We’ll talk again and just say, I saw somebody said this in the chat. Please say who the ABA is.

KL: Yeah. Applied Behavioral Analysis. It’s services for kids with autism, and it’s a major growth area in Medicaid spending. It’s been identified by a bunch of different states and in fact, some of the crackdown in Minnesota, you’ve heard the news sort of reported it as daycare, but a lot some of the services at issue in the Minnesota crackdown were ABA services. So that’s one of the areas.

So if a managed care organization is overseeing the ABA program in Massachusetts, it’s really important for me to understand if they have been meeting with providers, what they’ve been saying to those providers, have they told them they’re compliant with regulations? If they told them they’re compliant, I’m not going to be able to tell them they’re not, right. So it’s useful for us to be aligned on sort of the enforceability of requirements. And when they identify key issues, it’s important that they send them our way.

The one caveat I would add here is that there has been a bunch of action about fraud by managed care associations. Almost all of it has been in the Medicare Advantage space, which, much like Medicaid managed care, is the private health insurers that administer Medicare programs. That fraud has been about those Medicare Advantage plans, misrepresenting health statuses of their members to get more money from the Medicare program. That is something that is also important to the Medicaid program.

And in May, we sued UnitedHealthCare over allegations that they did just that in their Medicaid managed care plan and allege that they misrepresented the health statuses of their members and did so in a way that cost Medicaid, we allege in our lawsuit at least $100 million. So these are the managed care organizations are important partners, but it is also important that both the Medicaid agency and the MFCU be watchdogs of the way that money has been spent.

Dan Gorenstein: What is it that you really want people to know about how helpful these managed care companies have been in being partners to you around fraud?

KL: I would say that the value of the partnership is high and the variability among the partners is high as well. And so it is important. So one of the reasons why I meet with everybody every three to six months is to try to standardize this process. But a lot of this stuff, Dan, is relationship dependent, right? There’s a lot of different agencies and organizations involved in anti-fraud work. And when we operate in silos, it’s much harder to get our work done. And sometimes breaking down those silos is a matter of personality more than it is sort of institutional or organizational goals. And frankly, just like any other personality stuff in managed care, sometimes it depends on who’s running those organizations. Right? And so the variability is somewhat high in Massachusetts, we’re working to sort of bring everybody up to the same level.

Dan Gorenstein: Very good. Thanks, Kevin. Let’s move to this next question. Now that we’ve got a bit of grounding in what states do to address fraud. I’d like to talk about the Trump administration’s recent actions. Holly Sauchelly and Sam Leavitt want to know what federal actions and tools have been helpful to states in their efforts to combat Medicaid fraud. I know from our prep calls that each of you have examples of this. So I want to go down the line and hear from each of you. Amir, let’s begin with you this time.

AB: Yeah, absolutely. I think the recent actions that CMS has taken have actually been quite constructive in terms of our engagement with federal regulators and oversight agencies to combat fraud, waste and abuse, Dan. And specifically, as Kevin was sort of getting at in his relationship with MCOs, one of the things that they’ve done, which sounds very simple, is just coordinate very effectively across layers and levels of government and different organizations with different functions, from enforcement to the Medicaid agency to the MFCUs. Getting everyone on the in the room to really get in the weeds and tackle issues very systematically. They’re referring to it as a war room concept, and we have only started that with them. But the direct engagement from the center for Program Integrity, the direct engagement from the Inspector general at HHS. It is leading to more expeditious action and more expeditious prevention of suspicious or identified actions of fraud, waste, and abuse.

Dan Gorenstein: And real quick, Amir, just on this sort of like this war room mentality, getting the layers to sort of coordinate together, this reminds me, I have no idea why this memory popped into my mind, but listening to your answer, I was reminded of I was a general assignment reporter at New Hampshire Public Radio for years. And there was some, you know, kind of like 500 year flood type thing. And the governor was hell bent on really making sure that this town could be taken care of and rebuilt quickly, effectively, and really sort of had this same approach and things kind of just happened.

Many of us, though, who are not, you know, government employees don’t understand what it means when like you get everybody aligned when those layers kind of coordinate. Why is that so important to actually seeing action?

AB: Well, I would say from, from my perspective in the state Medicaid agency, you’re not always interacting with different enforcement agencies at different levels. I mean, their purpose and mission is different than ours, which is to implement and administer the Medicaid program. So we’re very normally have our silos and people stay in their lanes, but that over time without coordination can lead to redundant tasks, very ineffective or slow decision making to take an action. So it’s, I think it’s more of like a refresh of everyone’s sort of roles and responsibilities, but bringing them together, which can get stale if you don’t do it in sort of a continuous monitoring style of approach.

Dan Gorenstein: Very good. How about you, Drew?

Drew Gonshorowski: Yeah. So I think, I think one example that, that I can point to specific in this and really, Amir and Kevin have both talked about this team, not not only for the federal government, but also for the MCOs is just in terms of this applied behavior analysis toolkit. I think this is a great example of the new flavor of fraud work coming out of CMS where they more or less survey a lot of stakeholder groups. They do a lot of research. They pull data that at the federal level, they would only have access to and be able to sort of disseminate that to states in a way that’s digestible and usable is really important, too.

But this sort of unifying work around, okay, we’ve understood that there needs to be a conversation here, but here’s, you know, a long list of recommendations or possible options for states to adopt, bringing that to light, sort of creating that what breaking down these silos and having that sort of purposeful conversation.

And I would highlight MCOs have that role too, in that most of them operate across state lines, and they understand sort of the pressures and the tensions that are in in other states. And they can bring that information into a state Medicaid program, because often, especially at the director of the light, we feel like we’re at on an island and there’s a lot of information asymmetry to be broken down. You know, just not knowing what you should know is a huge issue across all state programs. And anything that sort of brings synthesizes information for programs to act on is really important.

Dan Gorenstein: Thanks, Drew. One quick question, follow up for you on this. With this greater this purpose, this intentionality from the from the administration is the sort of default assumption there is fraud and we must root it out. And that is why we have to have these surveys. We want to engage, we understand there’s fraud and we’re trying to get at it. And that’s part of what’s new here, is this that assumption?

Drew Gonshorowski: So I think that it’s more that there is this acknowledgement that states need to be better equipped when there are issues in their programs that they identify. And I think it’s CMS sort of acknowledging their role in helping to support states in doing the right thing. And at the core of this, right, it’s about ensuring that appropriate services are delivered to members at the right level, at the right time, so that states can operate with those limited resources that they have and ensure that everyone is, you know, effectively getting like the appropriate level of care. so I think that it’s not necessarily this tacit assumption that there’s fraud everywhere and that’s why they’re entering in. It’s more around, okay, we’re creating some system around. We know this is an issue. Let’s figure out how to work together towards a solution.

Dan Gorenstein: And Kevin, quickly from you.

KL: Yeah. So I think that the emphasis on the sort of anti-fraud efforts from the administration have benefited us as far as collaboration, right? In the enforcement space, we work historically with the Drug Enforcement Administration on prescribing cases. We work with the FBI, we work with the local US Attorney’s office.

And so when those agencies have been given a directive that they are to prioritize anti-fraud efforts, it is the case that we become resource multipliers, which is the only mission I have, right, which we become resource multipliers for each other. And so in Massachusetts, we have seen an uptick in joint sort of enforcement efforts. Those are still sort of progressing. So it’s not really possible for me to give you like a great example of that yet. But we have seen a real uptick in the in the sort of level of collaboration with federal partners, with whom we share a common mission. But when they get a directive from the top to do it, it makes it easier for us to coordinate.

Dan Gorenstein: When we come back, our panelists respond to concerns about anti-fraud efforts harming patients.

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Dan Gorenstein: Welcome back. 

You’re listening to a live conversation that I moderated on September 17 about how states respond to fraud in Medicaid. Joining me were New York Medicaid Director Amir Bassiri, former Nebraska Medicaid Director Drew Gonshorowski and Massachusetts Medicaid Fraud Control Unit Director Kevin Lownds.

So we’ve talked a lot about the upside of this increased focus. Of course, there are a lot of concerns about what the administration is doing, and I’d like to go over some of those in the next few questions.

The biggest fear, perhaps, is that this anti-fraud push is just making it harder for people to get vital services. For example, Politico reported earlier this summer on a Minnesota group that provides caregivers for adults with severe disabilities. The founder said she borrowed $90,000 from friends and her savings to stay open after the state paused Medicaid payments as part of its federally directed crackdown. This pause in Minnesota happened to thousands of providers in the state and obviously threatens to disrupt anyone receiving care from those providers.

Jennifer Kucera wants to know how you all guard against unintended consequences when going after fraud. Amir and Drew, how have you all tried to strike this balance in your state? Whoever wants to start is great.

AB: Since I’m off mute, I will start, and I think this is a fantastic question and something that we grapple with daily, especially now with the attention on this. We certainly take a balance and approaching issues like this. We try to communicate directly with industry prior to big bold changes or widespread changes.

I mean, the action being referenced in the Politico story, it’s a pretty high bar that needs to be met to stop payments, to literally halt payments to Medicaid providers. So there is likely, in these cases, substantial evidence to suggest there’s something wrong and you need to do something to prevent it or it will not stop itself. So actions, unfortunately, in our programs, which are very large, dependent sometimes on legacy or old technology and systems, do not always enable conducive, precise, targeted actions to just those that are or may be misbehaving.

So like in short, there are certainly examples of innocent bystanders that can be impacted by actions that the state Medicaid agency takes. However, what we try to do to balance this is prioritize continuity of care. Because even if one person is losing access to a critical essential service, they’re determined eligible for we have failed is how we view this.

So we try to take a balanced approach with our programmatic staff as compared to our civil criminal enforcement and other federal partners. but continuity of care policy and transition policies in our model contracts, in our state laws are things that we try to put in place so that we can transition. We are required to maintain continuity of care. So if it is not fraud, if someone is actively receiving services, we have processes in place to ensure that they will continue receiving those services at another provider in good standing.

Dan Gorenstein: Basically, if I am getting care from a provider who’s engaged in some sort of fraudulent activity, you have practices and policies in place that help me transition from going from the fraudster provider to a legit provider with a minimal amount of interruption to my care. That’s what you’re saying?

AB: Absolutely. I mean, it’s a tremendous amount of work and coordination amongst the state Medicaid agency, but that’s the approach we take each time instances like this occur.

Dan Gorenstein: And Drew, sometimes I get carried away with my follow up. So if you just have a very quick example, so we can keep moving through some of these questions.

Drew Gonshorowski: Yeah, for sure. And I think Amir has, has really highlighted what I was going to say in these comments too, which is at the end of the day, this is, whether it is sort of on the side of enforcing appropriate care in our, in our programs or fraud activity or fraud detection activity versus what is an integral part of this too, is an understanding where our members are and how we can ensure that if some action has to be taken. The plan is already in place to facilitate transitions, because that is ultimately a lot of the work that happens behind the scenes in these state programs is especially in that space.

Everyone thinks about where there’s harm and figures out how to mitigate that harm at every step of the way. And that’s ultimately the goal is because to Amira’s point, too, I think it was the case in Nebraska, too, that if you interrupted continuity of care for someone that needed that service that was an abject failure, right. And that only can be prevented through that hard work and planning, understanding where people are receiving services, working closely with your plans and ensuring that there’s transitions, plans across the board and also working with the providers that you have to possibly take action on, which is saying, okay, you know, what is that handoff actually going to look like? What is your transition plan? Because they do have regulatory obligations in that space to aid in that process too. And that is another thing that you can refer over to the Kevin in your state to when, when providers fail on that.

Dan Gorenstein: How hard is it to do those transitions? So there’s genuinely no break in care. Like, are you usually able to do this or a lot of people ended up falling through the cracks, Drew? And I know how much you know, because you and I have spent some time together. We’ve talked. I know how much in your heart and soul, when somebody loses care that they should be getting, I know that actually really genuinely bugs you at an individual level. How hard is it to actually do this? I’m sure it’s easier to say it than do it, but how hard is it to actually to make sure people don’t fall through those cracks?

Drew Gonshorowski: So one of the pieces that gets really difficult is ensuring that the actual handoff or the transition happens, which is sometimes difficult work, right? So it’s making sure that you have enough of a runway to reach the member and make sure that they’re bought into the plan too, because that’s often difficult too. So that’s really close work with your case managers and your plans.

But that’s ultimately, I’m speaking also as a former director of a pretty small state and generally the planning when I’m doing work that’s planning across 1200 to 1500 kids or 2000 adults in a service that needs special attention, we can almost do a full plan for the whole universe. And other states aren’t necessarily. They have membership that is much larger than what mine was, so you can’t necessarily be as granular or hands on in planning, right?

Dan Gorenstein: I’m watching, I’m seeing Amir laugh here. Go ahead, Amir.

AB: But only because it to Drew’s point, like this is very challenging. and can be very challenging if you’re in a rural or remote geography depending on your provider capacity. We have very large provider capacity, which helps in instances like this. We have over 200,000 enrolled Medicaid providers.

But Dan, what I was going to say to build on what Drew said, this is sort of why the focus on prevention and monitoring is so important, because when problems get too big, it is very hard to be precise and ensure that you are tackling only that problem. Hence the need to really jump on these things as soon as they pop up. But what we also do in our transition policy, which is a little interesting, is we require the provider and or plan, if it was an enrollee, to maintain the service authorization. So in the case that they are being authorized a number of hours for a service, when they go to transition to a new provider, we require that provider to honor that service authorization for at least six months.

So that is one way to provide continuity. However, at the end of the six months, that provider may want to do another assessment to determine whether that service authorization was appropriate. And they may have a difference of opinion or their clinicians may have a different conclusion. So there’s always things we monitor. It is very challenging. We try to put policy in place to protect the member.

Dan Gorenstein: Drew and Amir. Are there any worrying signs you’re starting to see that these stepped up anti-fraud work is having real human costs. Anything specific and concrete?

AB: I think people are scared. I mean, I’m only saying that in terms of when we look at our enrollment, we are seeing enrollment decline in certain populations in certain parts of the state prior to some of these federal policy changes, even taking effect. So that I would say that is something we are observing in New York.

Dan Gorenstein: Drew? Nebraska?

Drew Gonshorowski: So prior to my departure, at least in specific, and I can speak specific to the applied behavior analysis changes that we had put into place. And, for our experience, it was closely monitoring sort of provider participation. And then also members served by region, ensuring that we knew if an issue would have come to our attention, we’d be able to understand sort of the previous conversation around transitions and at least I guess at this point, three or four weeks ago, there wasn’t necessarily an issue there. We had added children in terms of the service line on ABA and also continue to add providers through all of the changes.

So I guess my response at this point is when states take these actions. It’s so important to ensure that you’re monitoring at the member level, the impact, whether, you know, you’ve maybe tightened things too aggressively in too short of a time frame and anticipate some provider attrition or having those plans in place to monitor too, just so you can react quickly is so important.

Dan Gorenstein: Very quick, just yes or no? Drew, are you scared that people are going to be hurt because of, you know, some of this kind of like collateral damage.

Drew Gonshorowski: So I won’t give you a yes or no. I think that there is the possibility that people are hurt through inaction here too, because ultimately this is two sides of the coin, right? If you aren’t protecting your programs for the people that need them, and you’re also not policing whether or not they enter into services that actively harm them, you create a massive risk for your program.

Dan Gorenstein: Final concern that I’d like to hit. We’ve heard that some of the more contentious tools the administration is using are counterproductive. Paula mentioned earlier the $2.5 billion in Medicaid payments the feds have put on hold in both Minnesota and California. HHS has also temporarily defunded the MFCUs in Hawaii and New York.

Tradeoffs sources have told us that these big penalties have made some states hesitant to be fully open with CMS about problems that they’re having with fraud, out of fear that they could be next. Are you all concerned that any of the approaches the federal officials are taking will actually make it harder for states to tackle fraud? Kevin, why don’t we start with you? We haven’t heard from you in a couple of minutes here.

KL: Sure, I think that the concern that I would have relates to personnel. Right. When there was a lot of turnover at the federal level in early 2025, after the fork in the road email and the changes to remote work policy, the resources that I mentioned earlier about our federal partnerships were depleted a bit. Right. And if you’re looking to be a force multiplier with federal officials and there’s a lot of turnover at that level that can create challenges in sort of partnering together.

At the same time, if there is a fear that there is instability with the MFCUs from some of the decertification and things like that, Massachusetts was recertified without an issue. But even even so, right in that uncertain climate, is that going to affect my recruitment? Is that going to affect my retention? Is that going to affect my ability to bring in the people needed to push for these anti-fraud efforts? That would be the concern from my sort of laser focused on enforcement and Resources for appropriate enforcement. Does it affect personnel at the federal level? We’ve seen this push towards anti-fraud. That has been helpful. But if there’s a push against state MFCUs will that affect recruitment and retention here, right. And so that’s the concern that I would have.

Dan Gorenstein: Amir?

AB: I think there is some concern depending on the extent to which it goes. And the focus primarily in some of the home and community based services. You know, some of these service delivery methods are, are new or they’re taking different approaches to reach access issues. And there’s not sometimes there needs to be nuance.

But what I would say is, no, we’re not scared. Governor Hochul has been leading in ever since she started with or without the federal government’s support on issues, to the point that Drew made. There is a cost of not addressing fraud, waste or abuse, especially in our state that operates a state global cap or a state spending cap on cash. if spending is increasing in areas, it prevents us from making investments or maintaining costs elsewhere. And so we have been very front and center with things on pharmacy and the 340B program, the consumer directed personal assistance program, ABA that we’ve been talking about. Not all of those have been in concert with the federal government. Some of them happened before this administration started. But to your initial question, I think depending on how far it goes, there could be some concerns. I know our program wouldn’t operate as well if we had $1 billion deferral, but we’re working really hard and in partnership with CMS to avoid that.

Dan Gorenstein: And Drew, perhaps you’ve got the most latitude here to speak candidly as a not current state employee. Do you think this will, you know, spook some folks? When you’ve talked with, you know, other Medicaid state officials, have you heard that kind of thing?

Drew Gonshorowski: So I think it’s reasonable to expect that there’s going to be a little bit of fear, right? It’s sort of a new focus, a new lens. But I just really want to take a moment to celebrate what Amir just said there, because that’s ultimately, I think across at least my experience being with all of the 56 Medicaid directors, including myself, you know, at the end of the day, you have a bunch of people that sit in that seat. And this is really tough work.

But at the end of the day, they are mission aligned on, on trying to do right by their membership. And a piece of that is doing this hard work. And I don’t think that, the broader sea level here is going to stop that work because to Amir’s point, you know, you don’t really sit in that seat if you’re if you’re going to sit there and not do the right thing.

Dan Gorenstein: Thanks very much. Final question. We’ve got about five minutes here. this is obviously become a very politically charged topic. There’s real money at stake. Real people’s health is at stake. I think we’ve been all very candid about both of those things this hour. What’s the one thing as Medicaid leaders that you want people to hold on to when they’re hearing discussions of this going forward? Kevin.

KL: What I would say is that, and again, I’m speaking from a fairly narrow perch because I’m speaking on enforcement efforts specifically, right. And those enforcement efforts often include trying to improve the quality of services delivered to Medicaid members, right.

Oftentimes when we’re talking about providers that are non-compliant, but that we’re not trying to throw in jail. One of our goals is to improve the quality of services delivered to Medicaid members, right. From my perspective, the better the fraud enforcement efforts at the state and federal level, than the more precise, the more effective, the more targeted and the more thoughtful, which generally comes with more resources, the more likely it is that Medicaid members will receive higher quality of care and will not have to deal with sort of fraudulent providers.

I’ll end with a story, Dan, the woman whose home health agency billed for $3 million of fraudulent services that I began this with. Actually, the way we discovered that was because a patient was unable to get physical therapy because she was already billing for his physical therapy and his claims were getting kicked. Right. And so folks in the chat have been talking about the necessity of targeting, and I agree with that. But I think when there is fraud and there are sort of quality of care concerns, the human cost is real from this. And the more targeted and effective the collaboration between the state and federal government, the more effective the Medicaid, the better the program integrity will look.

Dan Gorenstein: Let me just jump very, very, very brief, because I want to make sure Amir and Drew have a chance to answer this final question, too, though. You’ve done this for ten years. There’s got to be a very real like capacity is a very real thing. These Medicaid providers have limited capacity. The more they’ve got to deal with answering surveys about fraud, thinking about fraud, all that that’s going to take away from their actual mission. Is that right?

KL: I mean, I think that Medicaid providers do, I think if a provider was standing here, they would say, yes, right? And so I think the answer is yes because I value that perspective. From our perspective, we do our best to be targeted and precise. And the more resources we have to do that, the more effective we can be at making sure that legitimate providers who have not committed fraud do not get caught in the crosshairs. Right? It’s easier to do that with more resources. And so the better the collaboration, the more effective we are.

Dan Gorenstein: Very good. Drew?

Drew Gonshorowski: I think for our work, my main takeaway was ultimately that good program integrity work and good work on fraud, waste and abuse begins with quality thoughtful policy. So this is effectively building the right bumpers on your bowling alley before you even get going. You want to ensure that you can test against correct clinical practice and ensure that examples like Kevin has described don’t happen because that’s what keeps us up at night, right? Is someone walking through the door and entering into a space that they’re either harmed or unable to receive the care that they need?

Dan Gorenstein: Very good. Amir? You get the last word, but you only have 30 seconds.

AB: Because I think and Drew and I have talked about this in the past, but his response is very much aligned with mine. And I’ll synthesize by just saying incentives matter and states and policy makers, legislators, those incentives they establish dictate how some of this plays out in practice and on the ground. So policy matters.

Dan Gorenstein: Thank you very much. Before people take off, I just want to say a big, huge thank you to our wonderful panelists. Please join LDI for their next virtual seminar on October 23rd: Access and affordability in the age of GLP1s. And a huge thanks for you all joining us and hope you all have a wonderful day. 

Thank you for listening to this extended live edition of Tradeoffs.

You can find the video of this conversation along with all of our reporting on Medicaid on our website, tradeoffs.org.

I’m Dan Gorenstein, this is Tradeoffs.