Vice President J.D. Vance announced a sweeping new federal crackdown on healthcare fraud Wednesday, unveiling what administration officials described as the largest anti-fraud effort in the history of the Centers for Medicare & Medicaid Services.
The initiative includes withholding roughly $1.4 billion in payments to suspicious hospice and home health providers nationwide, suspending hundreds of providers in the Los Angeles area, and imposing a six-month nationwide moratorium on new Medicare enrollments for hospice and home health agencies.
Speaking at a press conference alongside federal health and law enforcement officials, Vance framed the effort as both a fiscal and humanitarian issue.
“Fraud always has two fundamental victims,” Vance said. “The first victim is the American taxpayer. But it also has as its victims the people who are meant to benefit from these programs, who are not able to benefit — or maybe are benefiting less – because of what a disaster some of the fraud has wrought.”
Federal officials said California became a central focus of the investigation after the administration determined the state had failed to adequately oversee its Medicaid program. According to CMS Deputy Administrator Kim Brandt, investigators identified massive irregularities in provider billing and spending patterns.
Brandt said CMS uncovered $630 million in provider billing flagged among the top 5% of outliers nationally, another $500 million in suspicious home healthcare spending growing at twice the national average, and approximately $200 million in questionable payments.
California officials have reportedly been asked to explain the discrepancies before any of the frozen federal funds are released.
Mehmet Oz, better known publicly as Dr. Oz, questioned the unusually high concentration of hospice providers operating in the Los Angeles region. Officials said many of the suspended providers had billed substantial amounts through Medicare and Medicaid programs, but few challenged the suspensions after enforcement actions were announced.
“The response has been crickets,” officials said during the briefing.
As part of the broader anti-fraud strategy, CMS is now implementing a six-month nationwide freeze on new Medicare enrollments for hospice and home health agencies. Existing providers will still be allowed to operate, but no new agencies or providers will be approved while federal officials develop stronger verification and screening systems.
The administration also used the event to criticize uneven fraud enforcement efforts among states receiving large amounts of federal Medicaid funding.
Vance highlighted Hawaii and New York as examples of states that had received billions in Medicaid dollars but produced relatively few criminal fraud prosecutions. According to Vance, Hawaii recorded zero indictments or convictions tied to Medicaid fraud in recent years, while New York generated only nine indictments despite overseeing a Medicaid program worth roughly $100 billion annually.
By comparison, Vance said Indiana — a state with about one-third of New York’s population — produced more than four times as many fraud indictments during the same period.
On Tuesday, federal officials reportedly sent letters to Medicaid programs in all 50 states demanding documentation of prosecutions involving serious fraud cases. States unable to demonstrate meaningful enforcement could risk losing federal Medicaid Fraud Control Unit funding.
Despite sharp criticism aimed at some states, Vance stressed the administration does not view healthcare fraud enforcement as a partisan issue.
“This does not have to be a red state or a blue state issue,” he said. “This is just basic good government.”
Vance specifically cited Ohio and Maryland as examples of states with differing political leadership that have cooperated with federal investigators.
Brandt also highlighted the administration’s growing use of real-time claims monitoring technology. The Medicare Fraud War Room — launched in 2025 — has reportedly blocked more than $2 billion in fraudulent payments before money was distributed. Federal officials said a parallel Medicaid system is now operating in coordination with the Department of Justice, the FBI, and state fraud units to identify suspicious claims before payment approval.
Andrew Ferguson argued the issue extends beyond financial losses, tying fraudulent activity directly to patient safety and elder care concerns.
“When the states just take this money and turn it into a jobs program for blue state lawyers, they are effectively participating in elder abuse,” Ferguson said, noting that Medicaid Fraud Control Units are legally required to investigate abuse and neglect in care facilities.
Before concluding the event, Vance emphasized what the administration views as the broader long-term impact of the crackdown: extending the life of the Medicare Trust Fund without raising taxes or cutting benefits.
