Lawmakers Propose $28 Billion Investment to Combat Fraud

Lawmakers proposed a $28 billion allocation on July 22 to the Health Care Fraud and Abuse Control Program to be made over four years.

The program, established in 1996, is a joint initiative of the Department of Justice and the Department of Health and Human Services’s Inspector General.

It coordinates investigations and prosecutions of healthcare fraud across federal, state, and local agencies, primarily targeting abuse in Medicare and Medicaid programs.

House Budget Chairman Jodey Arrington (R-Texas) and six other Republican lawmakers introduced the Anti-Fraud Fund Act as an amendment of the Social Security Act. The bill would fund the joint anti-fraud effort with $7 billion per year from 2027 through 2030.

Cosponsors include Reps. Blake Moore (R-Utah), Jay Obernolte (R-Calif.), Glenn Grothman (R-Wis.), Mike Carey (R-Ohio), Addison McDowell (R-N.C.), and Lloyd Smucker (R-Pa.).

The bill’s sponsors anticipate a 7-to-1 return on the spending in recouped funds and halted fraudulent payments, amounting to net savings of more than $168 billion over 10 years.

“The Anti-Fraud Fund Act is a commonsense bill that strengthens [Centers for Medicare and Medicaid Services]’s ability to prevent, detect, investigate, and prosecute health care fraud, ensuring taxpayers’ hard-earned dollars never leave the Treasury into a fraudster’s hands,” said Arrington in a July 22 statement, citing $275 million in taxpayer dollars stolen every day from the Medicare and Medicaid programs.

In April, Inspector General March Bell requested $447 million for the fiscal year 2027 budget, most of which was to be used to oversight of Medicare and Medicaid as part of the Health Care Fraud and Abuse Control Program. That budget request was a 3 percent decrease from the amount appropriated in 2026.

For 2025, Inspector General oversight resulted in nearly 1,600 criminal and civil actions and the exclusion of more than 2,800 individuals and entities from federal healthcare programs, as well as more than $19 billion in potential recoveries.

“Investment in [the Office of Inspector General] yields a strong return for the American people,” Bell said, adding that it returned nearly $13 for every dollar spent in 2025.

The federal government loses between $233 billion and $521 billion annually to fraud. An additional $2.8 trillion in federal dollars was improperly paid since 2003, according to estimates from the Government Accountability Office.

The proposed bill is part of a broader push to confront fraud and reduce waste across federal operations through investment in technology and personnel in anti-fraud efforts.

As of June 11, the House Oversight Committee had recommended 11 bills to stop fraud and improper payments in federal programs.

“Americans work hard for their money, and they expect their government to treat every tax dollar with respect,” Rep. Glenn Grothman (R-Wis.), chairman of the Subcommittee on Health Care and Financial Services, said in a statement.

“Unfortunately, we’ve seen time and again that fraud in federal programs is far too common, and often preventable. The problem isn’t just bad actors; it’s a system that hasn’t kept up with the scale of the challenge,” Grothman said.

“The Anti-Fraud Fund Act will give federal investigators the personnel and technology needed to identify fraud sooner, stop bad actors, and recover taxpayer dollars,” Obernolte said.

The legislation comes shortly in the wake of the Centers for Medicare and Medicaid Services withholding more than $1 billion in Medicaid payments to Minnesota and California over alleged fraudulent billing.

Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, said the agency would break the pay-and-chase cycle.

“If it smells like fraud, we’re not paying for it anymore,” Oz said in a July 21 press conference, citing data outliers and abnormal billing ​patterns.