Trump Admin Cuts Funding to Hawaii Medicaid Fraud Control Unit

Federal authorities have decertified Hawaii’s Medicaid Fraud Control Unit due to a decade-long “abject failure” to enforce state and federal laws to prohibit fraud in the state, Andrew Ferguson, co-chair of the White House Fraud Task Force, announced on June 4.

March Bell, inspector general of the Department of Health and Human Services, ended the Unit’s operational grants, according to a letter from Bell to Hawaii Attorney General Anne Lopez obtained by The Epoch Times.

Hawaii receives approximately $3 million per year from the federal government for fraud-fighting responsibilities, according to Bell.

The federal government “will not make further payments to [Hawaii’s] Unit,” Bell wrote.

“Hawaii’s Medicaid Fraud Control Unit has received millions and millions of dollars to fight fraud and has consistently been one of the lowest performing fraud units in the country,” said Ferguson.

Between 2021 and 2025, Hawaii’s unit received approximately $12 million in federal tax dollars for fraud fighting.

During the same period, Hawaii’s Medicaid funding increased by 27 percent, and its enrollment grew by 40 percent.

In 2024, Hawaii’s Medicaid program enrolled more than 490,000 residents, with total spending reaching $3.11 billion—averaging more than $6,000 per enrollee—according to Bell’s letter.

Despite these increases in scale and resources, the unit “did not produce a single conviction or obtain a single indictment of a fraudster from 2021 to 2025,” said Ferguson.

“Enough is enough,” Bell wrote. “The Hawaii [Medicaid Fraud Control Unit] for many years has not effectively carried out, and is not currently effectively carrying out, its statutory fraud-fighting functions and requirements.”

Every year, United States taxpayers send $2 trillion through Medicaid and Medicare out to the states, according to Ferguson.

“There are conditions on the money that goes out to the states—and one of them is very simple: If states want access to this money, they have to create a unit to fight fraud in those states,” Ferguson said.

Hawaii’s Department of the Attorney General intends to seek reconsideration of the U.S. Department of Health and Human Services’ decision, according to a statement emailed from spokesperson Toni Schwartz to The Epoch Times.

“Medicaid fraud enforcement is not measured solely by convictions. It includes preventing fraud, recovering taxpayer dollars, protecting beneficiaries, and pursuing appropriate civil and criminal remedies based on the facts and the law,” reads the statement.

Although through civil judgments, Hawaii’s Unit recovered almost $14 million from Medicaid fraud from 2021 to 2025. The civil recoveries amount to less than 0.01 percent of Hawaii’s Medicaid expenditures from the same time period, Bell stated in the letter.

Vice President JD Vance accused Hawaii officials of not taking fraud seriously in a May 13 press conference on anti-fraud initiatives.

“You have had effectively free rein from the government of Hawaii to commit as much fraud as you want. That is a complete disgrace,” Vance said.

Following the federal decision, Hawaii Gov. Josh Green announced the creation of an independent Medicaid Fraud Strike Force to strengthen oversight in fighting Medicaid fraud. Schwartz emailed Green’s statement to The Epoch Times.

“The findings outlined by the Office of Inspector General are serious and deserve a serious response,” Green said.

The strike force will provide a report to the governor by Dec. 31.

Following discussions with federal officials, Hawaii’s Medicaid program remains in “good standing,” according to the statement.

“This action does not affect eligibility, benefits, provider payments, or federal Medicaid funding.”

“We want our members, providers and community partners to know that their benefits and services will continue without interruption,” Hawaii Department of Human Services Director Joseph Campos II said in the statement to The Epoch Times.