THE WHITE HOUSE — Vice President J.D. Vance announced Wednesday that his anti-fraud task force is going to force states to prove that they actually prosecute fraud, threatening to strip billions from state legal coffers if they do not comply.
Each state has a taxpayer-funded Medicaid Fraud Control Unit (MFCU), which is specifically designed to fund investigations and prosecutions of Medicaid fraud. Vance said that the states will need to prove they are “aggressively” going after fraud, and if they are not, they will be stripped of all MFCU money so the federal government can do their jobs for them.
“We have red states and blue states that go after fraud aggressively, but we also unfortunately have some states, mostly blue states, unfortunately, that do not take Medicaid fraud very seriously,” Vance said at a press briefing in the Indian Treaty Room at the Eisenhower Executive Office Building.
Vance clarified that the task force will target the funding of impotent prosecution teams, not money allocated to program recipients.
Federal Trade Commission Chairman Andrew Ferguson, vice chair of the anti-fraud task force, said states allowing fraud are a “result of decades of corruption, particularly in blue states,” noting that many of them “have taken tens of billions of dollars to pay lawyers” to prosecute fraud, but have little or nothing to show for it.
“When the states just take this money and turn it into a jobs program for blue state lawyers, they are effectively participating in the elder abuse in those states, because the American people turn over their money to these state programs to protect their parents and their grandparents from elder abuse, and if you aren’t doing it, you are effectively participating in that process,” Ferguson said.
Vance said that if states refuse to prove they are going after fraud, “we are going to turn off that anti-fraud money,” and said the issue can escalate to turning off other resources as well.
“Our goal here is not to do that. We don’t want to turn off any money. What we want to do is ensure that people are taking fraud seriously,” he added. “We want to protect Medicaid. We want to protect Medicare, but we can’t do that if the states that are administering those programs are allowing those programs to be fleeced by fraudsters.”
When asked by The Federalist about whether the government suspects federal or state bureaucrats might be complicit in the fraud, Vance said it is “possible” and that his team is looking into whether there are cases that rise to the level of criminal conduct.
“As much as we care about protecting these programs, we also care about ensuring that federal and state officers aren’t violating the law, and if they are violating law, then of course we have to prosecute, and that’s an important part of the justice under law,” Vance said. “So we’re looking into this stuff, but I can’t … commit to it, because, unlike the last administration, we tend to only prosecute people when they actually violate the law, not just because they have the wrong political affiliation.”
Centers for Medicare and Medicaid Services (CMS) Administrator Mehmet Oz suggested there may be complicity from elected officials in some states, asking, “Do the governors always feel that fraud in Medicaid is a flaw?”
“We are concerned that some governors see these programs as jobs programs, and their downstream impact of that, that resembles political patronage that we’re very serious about,” he added.
Vance pointed to states like California, New York, and Hawaii that are rampant with fraud, but do not use federal funds specifically set aside for states to prosecute Medicaid fraud, noting Hawaii has zero indictments and zero convictions for Medicaid fraud in years.
“Not a single indictment, not a single conviction, because the administrators of the Hawaii program just don’t take it seriously. They don’t think that fraud is a big enough problem. They don’t care about protecting resources. They don’t care about protecting that Medicaid program,” Vance said, noting other states were similar, with absurdly low numbers of fraud prosecutions.
“New York has had nine indictments over the last year — nine indictments,” he said. “That’s a $100 billion Medicaid program just in New York, and you had nine indictments. Indiana, which has about a third of the population of the state of New York, has had more than four times as many indictments over the same period.”
Vance announced that the government is deferring $1.3 billion in Medicaid reimbursements to California because of state leaders’ neglect.
According to Vance, they have found fraud where people are prescribed unnecessary medications because “fraudsters have actually encouraged false prescriptions and false administration of medications.”
“You assume that your doctor is doing the right thing, but these fraudulent health care providers are getting rich by giving people medications they don’t even need,” he said. “It’s a defrauding of the American taxpayer, but it’s a violation of the trust that should exist between every American and the people who prescribe the medications.”
Ferguson said that there are numerous cases where gangs will steal the identity of Americans who are on a program like the Supplemental Nutrition Assistance Program (SNAP), max out those individuals’ EBT cards, and stop them from being able to access food programs that are helping them feed themselves and their children.
Oz said the fraud is astronomical, with billing “so big you can’t even imagine.” He explained, for example, that fraudsters can steal Medicare numbers and take money for unwanted hospice, and then if that person needs to go to the emergency room, he has no way of paying.
One-third of all hospice programs “in the entire country” are in the Los Angeles area, he explained, saying that it was impossible for all of them to be legitimate and that the task force suspects at least half are fraudulent. Oz announced that the government has suspended 800 of those hospice facilities, which charged the American taxpayers $1.4 billion.
One piece of evidence that suggests these companies were fraudulent is that of the 800 operations suspended, fewer than 20 contacted the government to find out what happened. From the rest, Oz said, all the government heard was “crickets.”
But fraudsters will move out of a place where they were shut down and set up shop in new locations, Oz explained. The anti-fraud task force has already been tracking a “sevenfold increase” in hospices in Nevada, and increases in Arizona and Texas as well.
In response, the government is placing a nationwide moratorium on establishing new hospices or home health care companies.
“We’re not taking away any services, but there will be no new ones licenses granted until we can figure out a better way of working across government,” Oz said.
Vance said that fraud always has “two fundamental victims”: the American taxpayer funding the programs, and the American who might genuinely need to use the programs.
