CMS Unveils New Initiatives to Address Healthcare Fraud

In parallel, the agency is targeting fraudulent billing by durable medical equipment (DME) suppliers.

The Centers for Medicare & Medicaid Services (CMS) has unveiled a series of initiatives aimed at strengthening oversight and curbing healthcare fraud, including withholding $259.5 million in Medicaid funding from Minnesota over program integrity concerns.

According to the agency, it notified Minnesota officials in January of its intent to hold back the funds while the state addresses federal concerns tied to Medicaid claims. Of the withheld amount, $243.8 million was flagged as “unsupported or potentially fraudulent” claims, while $15.4 million was associated with claims for individuals lacking satisfactory immigration status.

CMS said its review identified unexpectedly high spending and rising costs in several service areas, including personal care services and home health. If the state fails to demonstrate sufficient program integrity improvements or validate the claims, CMS indicated it could defer up to $1 billion in additional funding over the next year.

The announcement comes as the administration intensifies scrutiny of fraud, waste, and abuse across federal health programs. CMS stated it continues to oversee Minnesota’s corrective action plan to address the underlying causes of improper payments.

In parallel, the agency is targeting fraudulent billing by durable medical equipment (DME) suppliers. CMS reported that a six-month moratorium on new Medicare enrollment for certain DME providers prevented approximately $1.5 billion in fraudulent billings. During that period, the agency implemented additional safeguards and said it plans to publish a list of providers or suppliers whose Medicare participation has been revoked, along with the reasons for revocation.

CMS also announced it is seeking public feedback on additional fraud prevention strategies for potential inclusion in future rulemaking under the Comprehensive Regulations to Uncover Suspicious Healthcare (CRUSH) initiative. The agency is requesting input across Medicare, Medicaid, the Children’s Health Insurance Program and Affordable Care Act marketplace plans, including both enhancements to existing programs and new regulatory approaches.

CMS Administrator Mehmet Oz, M.D., said in a statement that the agency is shifting toward a more proactive approach to prevent fraudulent activity before payments are made.

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