Fraud Is Moving Quickly - Government Systems Aren't. The Right Contractors Can Fix That.
You don't have to look hard to find those ripping off the Medicare program. Two recent investigations illustrate just how deeply this problem runs - and how badly our government systems are failing to stop it.
In Los Angeles, a CBS News investigation found that hundreds of hospices across the city may exist only to bill the program that finances most of the health care for seniors and persons with disabilities. These Medicare beneficiaries all paid into the system during their working lives. One address alone is supposedly the location of an impossible 89 registered hospice agencies. The U.S. Department of Health and Human Services Office of the Inspector General found that suspected Medicare hospice fraud totaled nearly $200 million nationwide in 2023, and California has been "ground zero" for years. Despite repeated vows to clean it up, the red flags remain, the shell companies keep billing, and Medicare trust fund dollars keep flowing out the door.
In Colorado, a federal audit reported by The Wall Street Journal found that the state made $77.8 million in improper Medicaid payments for autism therapy services for children, with the state potentially on the hook to repay the federal government $42 million. The overpayments went to providers who billed for services without proper documentation including hours that couldn't be verified, and in some cases, services that may never have been provided at all.
These aren't outlier cases or anomalies. They are symptoms of a systemic failure: aging and inadequate data infrastructure, siloed payment systems, and a chronic failure to use the specialized tools required to detect, flag, and stop fraudulent and duplicate billing before the money walks out the door.
Fraud Isn't Outrunning Government - It's Outrunning Government's Tools to Stop It
Fraud and waste aren’t winning because bad actors are particularly clever - they are winning because government systems weren't built to talk to each other.
A hospice can register at an address already home to dozens of other hospice shells, and a state licensing database won't automatically cross-reference that address against Medicare billing records, business registration filings, or prior fraud alerts. An autism therapy provider can bill Medicaid for more hours than exist in a day, and without automated claims auditing, that flag never gets raised. Payments are approved not because anyone looked the other way, but because no one's systems were ever designed to look at all.
Modern technology can change this. Data integration platforms, real-time claims analysis, artificial intelligence-assisted anomaly detection, and cross-agency interoperability tools exist today. These aren't futuristic concepts — they are deployed right now in the private sector and in leading state programs. The problem is that most states don't have the in-house expertise or workforce bandwidth to implement them effectively. That's where qualified contractors come in.
States Need the Flexibility to Bring in the Right People
The federal government cannot fight this war alone. Medicaid is administered by states, and the solutions need to be local, nimble, and technically sophisticated.
But here's where bureaucratic rigidity becomes the enemy of accountability: too many states are hamstrung by procurement rules, hiring freezes, and civil service constraints that make it nearly impossible to quickly bring in specialized talent. By the time a state agency goes through the full procurement cycle, the fraudsters have already billed, collected, and moved on.
The administration's War on Fraud must include a clear directive: give states the staffing flexibility to contract with qualified private-sector specialists who can deploy modern anti-fraud technology quickly. This means streamlined contractor procurement pathways for program integrity work, so states aren't waiting six to eighteen months to get expert help on the ground.
The Bottom Line
Efforts to curb fraud, waste, and abuse will be won at the systems level. Every dollar misspent on unverified autism therapy claims is a dollar that doesn't reach the many child who could genuinely benefit from those services.
We have the technology. We have qualified contractors ready to deploy it – get in, do the job and get out without the states incurring the long-term costs of additional staff. What we need now is the policy framework that gives states the flexibility to act — to hire fast, to integrate wisely, and give states the tools they need in this fight.