Insurers Are Covering Up Wide-Scale Medicaid Fraud

The American Mind ^ | 06.04.2025 | John C. Eastman and Jacob Kuriyan

[E. Pluribus Unum]

New Mexico’s program is just the tip of the iceberg.

While experts have long dismissed large-scale Medicaid fraud as improbable, evidence from New Mexico tells a different story. This discovery presents an unprecedented opportunity to offset part of the $880 billion budget deficit without cutting healthcare services for enrollees.

As the most powerful stakeholders, insurers frame fraud as an issue with hospitals, physicians, and enrollees while quietly escaping scrutiny themselves. A 2020 Health and Human Services report claimed that fraud in Medicaid fee-for-service stood at 12.3%, compared to just 0.3% in Medicaid managed care, reinforcing the industry’s message that managed care is highly efficient. However, the Government Accounting Office offers a starkly different interpretation, arguing that fraud in managed care is simply escaping detection.

Unlike fee-for-service, managed care payments are issued in advance based on projected costs. When actual costs turn out to be lower, insurers are legally required to return excess funds. The failure to do so amounts to fraudulent retention—and this is where a massive financial recovery opportunity lies.

New Mexico’s Medicaid program provides a striking case study:

• A 2019 report from the New Mexico Legislative Finance Council revealed that the state recovered $660 million in overpayments made to Medicaid insurers between 2014 and 2017.

• The recovery occurred well after the 60-day deadline imposed by the Affordable Care Act, violating False Claims Act provisions.

• Under the False Claims Act, insurers must not only return overpaid funds, but also pay treble damages, which happens when a court awards a plaintiff three times the amount of actual damages assessed by a jury. Applying this rule, an additional $2 billion remains uncollected from New Mexico’s Medicaid insurers.

New Mexico’s case highlights a national loophole: 34 other states that expanded Medicaid under the Affordable Care Act received similar deliberate overpayments—yet they have taken no action to...

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TOPICS: Crime/Corruption
KEYWORDS: fraud; healthcare; medicaid; ripoff

[dragnet2]

Big insurance is a rip-off scam.

[Uncle Sham]

Third-party pay has inserted many extra people into the doctor-patient relationship who do NOTHING for the patient in attending his or her health care issue. Hospitals end up as money launderers for folks at the insurance office, the lawyers office, the court house, drug makers, health care product makers, and armies of pencil pushers in all of their offices to keep track of everything. It used to be just the doctor and his nurse you had to pay for. Now, thanks to third-party pay, there are hundreds of leaches making a living off of your need to see a doctor. And we all wonder why health cost is so expensive.

[E. Pluribus Unum]

Third-party pay has inserted many extra people into the doctor-patient relationship who do NOTHING for the patient in attending his or her health care issue.

[Bobbyvotes]

I canceled home insurance 3 years ago.
Only have minimum required liability car insurance. I won’t renew it in October and sign up for self insurance which has no cost.

[spel_grammer_an_punct_polise]

0bembacare gave a license to steal to the entire medical community and they are taking full advantage of it.

[grey_whiskers]

One wonders if this will do anything to the stock prices of various Health Insurance companies.