Louis Jacobson, PolitiFact
“One out of every $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 fees that President Donald Trump’s tax and spending invoice would lower Medicaid protection for tens of millions of Americans, Trump administration officials misleadingly counter that it targets solely waste, fraud, and abuse.
During an interview on CNN’s “State of the Union,” Russell Vought, the administration’s director of the Office of Management and Budget, framed Medicaid as sagging underneath the burden of improper funds.
An “improper” fee refers to funds made erroneously to beneficiaries and their suppliers or with out ample documentation.
Pressed June 1 by CNN host Dana Bash about issues that low-income Americans would endure if the invoice turns into legislation, Vought known as such arguments “totally ridiculous.”
“This bill will preserve and protect the programs, the social safety net, but it will make it much more commonsense,” Vought stated. “Look, one out of every $5 or $6 in Medicaid [payments] is improper.”
That would imply Medicaid’s improper fee charge is 16% to twenty%.
In a 2024 report overlaying the years 2022, 2023, and 2024, Medicaid’s mum or dad company — the Centers for Medicare & Medicaid Services — stated the speed was about 5.1%.
One conservative group, the Paragon Health Institute, stated the company has been utilizing an incomplete calculation methodology and that the share might be as excessive as 25%. Other specialists instructed PolitiFact that the precise numbers might be greater than what the federal authorities experiences, though not as excessive as Paragon’s estimate.
The White House didn’t reply to an inquiry for this text.
How High Is the Medicaid Improper Payment Rate?
Medicaid and its carefully associated Children’s Health Insurance program provides health care and long-term care to roughly 83 million lower-income beneficiaries, accounting for about one-fifth of well being care spending total. It is funded via a mixture of federal and state cash and is run by states underneath federal authorities guidelines.
Every 12 months, the Centers for Medicare & Medicaid Services publishes official numbers for the share of improper Medicaid funds, and in different federal medical insurance applications the company oversees.
In a 2024 evaluate of payments 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 primarily based on a three-year time span. The 2024 determine represented the third consecutive annual decline.
Are These Numbers Complete?
In March 2025, Brian Blase, a conservative well being coverage analyst and president of Paragon Health, a well being coverage suppose tank, co-authored a report that stated the official CMS improper fee charge figures had been unrealistically low for eight of the previous 10 years, as a result of in some years the company did not 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. Before that, he served as a well being coverage analyst for the Senate Republican Policy Committee and has labored for the Heritage Foundation, a conservative suppose tank.
The report stated 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 stated this might need elevated the improper fee charge as excessive as 25%, primarily based on the charges present in 2020 and 2021, when a excessive variety of eligibility checks had been included within the company’s methodology.
However, it’s laborious to substantiate whether or not lack of eligibility auditing brought about greater improper fee charges in 2020 and 2021, stated Jennifer Wagner, director of Medicaid eligibility and enrollment on the Center on Budget and Policy Priorities, a liberal suppose tank.
Wagner stated Medicaid enrollment procedures have fluctuated, which might assist clarify the upper charges in some years relatively than others. Using two years of information to generalize about traits throughout a decade, she stated, will not be essentially legitimate.
Robert Westbrooks, the federal Pandemic Response Accountability Committee govt director who labored in authorities oversight roles throughout Democratic and Republican administrations, instructed PolitiFact it’s believable that the formally reported improper fee charges for Medicaid might be too low.
However, Westbrooks stated pinpointing how a lot greater the speed is in actuality is a speculative course of. “I don’t believe anyone can credibly quantify the [difference],” he stated.
What Is an Improper Payment?
Health care specialists emphasised that improper funds should not the identical factor as waste, fraud, or abuse.
CMS maintains official definitions for these phrases:
Fraud: “When someone knowingly deceives, conceals, or misrepresents to obtain money or property from any health care benefit program.”
Waste: “Overusing 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.”
Abuse: “When health care providers or suppliers perform actions that directly or indirectly result in unnecessary costs to any health care benefit program,” which may embody overbilling or misusing billing codes.
By distinction, an improper fee “includes 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,” KFF, a well being info nonprofit that features KFF Health News, wrote this year.
“Although all fraudulent payments are improper, not all improper payments are fraudulent,” stated Jessica Tillipman, affiliate dean for presidency procurement legislation at George Washington University’s legislation faculty. “Most providers identify the improper payments and return them knowing how aggressively enforced” the authorized provisions are. “When they don’t, they open the door to significant liability.”
CMS stated about 79% of improper funds occurred when there was insufficient documentation.
This sometimes concerned instances wherein a state or supplier missed an administrative step, and it didn’t essentially point out fraud or abuse, the company stated. Instead, it might be an unintended oversight or mistake.
In different phrases, it was uncommon for strange beneficiaries to be scamming the federal government. “The vast majority of fraud in Medicaid is committed by providers or other actors, not enrollees,” Wagner stated.
Our Ruling
Vought stated that “one out of every $5 or $6 in Medicaid [payments] is improper.”
The official improper fee charge calculated by the Centers for Medicare & Medicaid Services in 2024 was about 5%, smaller than the 16% to twenty% charge Vought described.
A well being coverage analyst and former Trump adviser stated methodological shortcomings within the company’s evaluation might imply the speed is as excessive as 25%. Although it’s potential the speed is greater than the 5% the federal government reported, how a lot greater is speculative.
The assertion comprises a component of fact however ignores vital info, specifically the federal authorities’s personal knowledge. We charge the assertion Mostly False.
Our Sources
Russell Vought, interview with CNN’s “State of the Union,” June 1, 2025.
Centers for Medicare & Medicaid Services, “Fiscal Year 2024 Improper Payments Fact Sheet,” Nov. 15, 2024.
Centers for Medicare & Medicaid Services, “PERM Error Rate Findings and Reports,” accessed June 4, 2025.
Centers for Medicare & Medicaid Services, “2024 Medicaid & CHIP Supplemental Improper Payment Data,” accessed June 4, 2025.
Paymentaccuracy.gov, “Annual Improper Payments Datasets,” accessed June 3, 2025.
KFF, “5 Key Facts About Medicaid Program Integrity — Fraud, Waste, Abuse and Improper Payments,” March 18, 2025.
KFF, “Virtual Event Transcript — The Health Wonk Shop: Understanding Fraud and Abuse in Medicaid,” April 24, 2025.
Paragon Health Institute, “Medicaid’s True Improper Payments Double Those Reported by CMS,” March 3, 2025.
Government Accountability Office, “Improper Payments: Information on Agencies’ Fiscal Year 2024 Estimates,” March 11, 2025.
Email interviews with Tammie Smith and Craig Palosky, spokespersons for KFF, June 2, 2025.
Email interview with Jennifer Wagner, director of Medicaid eligibility and enrollment on the Center on Budget and Policy Priorities.
Email interview with Jessica Tillipman, affiliate dean for presidency procurement legislation at George Washington University’s legislation faculty, June 3, 2025.
Email interview with Robert Westbrooks, Pandemic Response Accountability Committee govt director who labored in authorities oversight roles throughout Democratic and Republican administrations, June 3, 2025.
