California’s Medi-Cal is sick with fraud — here’s – Latest News
Finding waste, fraud and corruption in Medicaid is a lot like diagnosing sickness in a human physique. You do an initial check-up and if one thing appears off, you order more exams.
That’s precisely what the US Centers for Medicare & Medicaid Services (CMS) did with California’s Medicaid program, often known as Medi-Cal.
During a review of state-by-state Medicaid spending, CMS noticed main warning indicators that would not be ignored. As a consequence, we deferred cost of $867 million to California for the second quarter of 2026 to take a nearer look.
Finding waste, fraud and corruption in Medicaid is a lot like diagnosing sickness in a human physique. You do an initial check-up and if one thing appears off, you order more exams. REUTERS
During a review of state-by-state Medicaid spending, CMS noticed main warning indicators that would not be ignored. As a consequence, we deferred cost of $867 million to California for the second quarter of 2026 to take a nearer look. Getty Images
Our greatest space of concern was California’s In-Home Supportive Services (IHSS) program, which reimburses particular person caregivers — who are sometimes unlicensed and unmonitored — for serving to disabled Medicaid beneficiaries with on a regular basis duties like altering garments or choosing up groceries. Over the previous two years, the price of this program grew by nearly 24%, practically twice as fast as personal care expenditures in the remaining of the nation, making California a vital outlier.
It’s true that many states are ramping up initiatives to help keep beneficiaries of their houses, however such speedy spending growth on one set of companies in a single state is typically a signal of a deeper downside.
That’s why we directed our program integrity consultants to undergo California’s expenditure experiences line by line, the identical manner a good physician would take a look at medical charts.
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Then, we took motion.
In response to the state’s spike in IHSS spending, we deferred over $390 million, to account for the quantity of California’s expenditure growth that is above the national average, till the state can clarify why its price of increase in spending is a lot increased.
We additionally deferred practically $255 million in suspicious claims from caregivers who billed Medicaid for companies to useless people, who claimed they handled more sufferers than they might deal with at one time; who confirmed up as statistical outliers amongst high IHSS billers; or who exhibited different irregularities.
We additionally deferred practically $255 million in suspicious claims from caregivers who billed Medicaid for companies to useless people, who claimed they handled more sufferers than they might deal with at one time; who confirmed up as statistical outliers amongst high IHSS billers; or who exhibited different irregularities. REUTERS
We didn’t simply take a look at one set of companies, nonetheless. We know California has a long historical past of siphoning federal funds out of its Medicaid program to pay for healthcare for noncitizens.
After taking a laborious take a look at this subject, we deferred round $220 million in funds that California needed to make for people with unsatisfactory immigration standing, in addition to a few different anomalous expenditures. Under the Trump administration, we is not going to tolerate federal taxpayer {dollars} funding free healthcare for unlawful immigrants and ineligible enrollees.
What makes these anomalies notably troubling is that we didn’t need any forensic accounting wizardry to seek out them. They virtually jumped off the web page.
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California officers may have recognized and addressed these points at any time by making use of the identical primary scrutiny, which raises an unavoidable query: Why didn’t they?
The best method to reply that is to ask cui bono — who advantages? In this case, some of the most important beneficiaries appear to be the highly effective unions that dominate California’s IHSS — and the politicians whose campaigns they fund with tens of tens of millions of {dollars}.
These incentives create a vicious cycle: Lax program integrity requirements imply more demand for caregivers, more caregivers imply more union dues and more union dues imply more donations for the elected officers who’re presupposed to be guarding the money register.
U.S. Secretary of Health and Human Services Robert F. Kennedy Jr. and Center for Medicare & Medicaid Services Administrator Dr. Mehmet Oz shake arms during a press convention on the U.S. Department of Health and Human Services in Washington, D.C., on Tuesday, July 21, 2026. The press convention was held to debate new actions HHS and the White House Anti-Fraud Task Force are taking to fight healthcare fraud. (Kylie Cooper) REUTERS
The Supreme Court has been unambiguous concerning the limits of that association. Under the 2018 resolution in Janus v. AFSCME, California should be certain that caregivers clearly, freely and affirmatively consent earlier than dues may be deducted from their Medicaid funds.
We consider California has not been doing that. In a latest labor grievance, one caregiver claimed that a union consultant locked the doorways at her orientation and advised attendees “no one is leaving” till they’d all signed a union membership card.
Other complaints are equally surprising. One caregiver was charged dues for over a 12 months regardless of writing “Do not wish to participate” on her opt-in type. Another spent 5 years making an attempt unsuccessfully to go away the union. Some mentioned they had been by no means advised union membership was non-obligatory. And a number of caregivers discovered cast signatures on their supposed membership playing cards.
These First Amendment violations aren’t the explanation for our deferrals, however they do help clarify the emergence of an ecosystem wherein state management has each incentive to keep the money flowing and no incentive to ask laborious questions. That’s how you finish up with ballooning packages, just like the 1,500% spike within the quantity of California hospice suppliers between 2010 and 2022; or the 24% two-year increase in IHSS spending we talked about beforehand.
As stewards of federal taxpayer {dollars}, we can not let these abuses proceed. We need California to have a healthy Medicaid program, however you’ll be able to’t deal with a affected person who insists there’s nothing incorrect.
We’ve run the exams, analyzed the outcomes and really helpful some way of life adjustments. California can both settle for sound medical advice now, or finish up back within the physician’s workplace after its situation has worsened.
Dr. Mehmet Oz is the seventeenth administrator for the Centers for Medicare & Medicaid Services (CMS). Dan Brillman is the director of Medicaid and deputy administrator at CMS.
