Leaders in the Centers of Medicare and Medicaid Services called out California recipients for fraudulently taking advantage of the state’s healthcare programs.
Kim Brandt, deputy administrator of the Centers of Medicare and Medicaid Services, testified before Congress on Tuesday about the investigation of fraudulent activity in California and across the country. She said CMS found one residential home in California that received $36,000 per month for healthcare services that were never rendered.
“The conditions were appalling,” Brandt said. “Unclean living conditions, moldy food, and most importantly, no caregivers present.”
Lawmakers pointed to prominent examples of fraudulent activity in Minnesota, California and Florida. Rep. Tom Joyce, R-Penn., called for stronger guardrails against Medicare and Medicaid fraud in the United States. He said states should be able to determine spending, but with oversight from the federal government.
“While states do have a duty to steward federal and state taxpayer dollars, responsibly, it is federal oversight that is necessary to root out systemic fraud,” Joyce said.
Democrats on the committee decried the Trump administration’s efforts to reduce fraud and accused CMS of only going after states run by Democrat leaders. Rep. Yvonne Clarke, D-N.Y., said she does not want to see the federal government go after fraud in New York, Minnesota or elsewhere.
“The abuse of taxpayer dollars is coming from the president of the United States who is using government resources as his personal revenge fund to punish his political enemies,” Clarke said. “Congress should not sit by while CMS abuses congressionally appropriated funding to take vital services away from people.”
She called for restoring $1 trillion dollars to Medicaid that was cut in the “One Big Beautiful Bill” last summer.
Rep. Brett Guthrie, R-Wis., slammed Clarke for her accusations and pointed to the launch of a recent CMS investigation in South Florida.
“If you think anything could be bipartisan, it’s when people defraud the taxpayers that work hard for the money who generously through the programs give it to people who are the most vulnerable and they’re being taken advantage of,” Guthrie said.
Rep. Frank Pallone, D-N.J., also called for an expansion of the affordable care act tax subsidies and to stop the Trump administration from pausing Medicaid payments to states. Last month, Vice President JD Vance announced the administration would pause $259 million in Medicaid payments.
Brandt said fraud in Medicare and Medicaid can leave other recipients with denied healthcare coverage and impact the care others receive as money is syphoned away.
She said the agency implemented algorithms to deny funding for applicants who display similar characteristics to previously identified fraud recipients. This program, Brandt said, led to a 60% denial rate in a new batch of 177 newly enrolled hospices in California.
Brandt also said CMS is investing in data analytics software to identify and uncover suspicious billing schemes for fraudulent payments. She said those efforts led to halting $2.1 billion in Medicare payments across more than 350 suppliers and providers.
Brand called for greater investment in technologies and algorithms to identify fraudulent activity in Medicare and Medicaid programs before it happens.
“Crushing fraud is not just about recovering funds after the fact,” Brandt said. “It’s about preventing harm, preserving trust, and ensuring that these programs remain strong for current and future generations.”