Health care fraud is a physical threat where unnecessary surgery and hospice abuse prove that the cost of greed is human life, experts say.
Medicare and Medicaid fraud is not just a financial crime but a physical threat to patients, a panel of experts told lawmakers on Feb. 3.
Patients often suffer from unnecessary, inadequate, or a complete lack of medical care in all cases of Medicare and Medicaid fraud, John Joyce, chairman of the Subcommittee on Oversight and Investigations for the House Committee on Energy and Commerce said. In other cases, patients are unknowingly victims of identity theft or misleading marketing practices perpetrated by these fraudsters.
“Health care fraud is becoming easier and more lucrative than the illicit drug trade,” said Joyce. “Patients will suffer if these health care programs cannot continue on responsible fiscal paths. It is our duty in Congress to protect these programs for our most vulnerable Americans.”
Fraud in the Medicare and Medicaid programs is a national crisis that has persisted for decades, with Medicare and Medicaid remaining on the Government Accountability Office’s High Risk List for more than 20 years.
The National Health Care Anti-Fraud Association estimates that 3 percent to 10 percent of health care expenditures are lost to fraud.
That translates to a minimum of $159 billion and potentially upwards of $530 billion in annual spending attributed to fraud, waste, and abuse, according to the witness statement of Jessica Gay, co-founder and vice president of Integrity Advantage Solutions.
In September 2025, the government estimated fraud ranged from $233 billion to $521 billion.
“The impact of that money is real, and it affects every single one of us. But money isn’t the only issue, not by a long shot,” said Gay.
Harm to Patients
Fraud harms patients in at least five ways, the experts testified.
First, when fraudsters submit fake claims, they often contaminate a patient’s official medical record, which can prevent the patient from receiving legitimate, necessary services because their benefits appear to be exhausted.
Stephen Nuckolls, chief executive officer of Coastal Carolina Health Care, shared an example of a patient denied therapeutic diabetic shoes because “Medicare records show shoes had already been provided by an out-of-state supplier, which our patient never received.”
The supplier was no longer operational, and the patient ultimately had to pay out of pocket for the shoes, he said.
Second, patients are often subjected to medical procedures, tests, or prescriptions they do not need simply so a provider can generate a profit, exposing them to significant physical dangers, according to Gay.
“These are not benign administrative errors. They expose individuals to risks ranging from adverse drug reactions to life-altering surgical complications,” Gay said in a witness statement.
Third, in hospice fraud schemes, patients are sometimes enrolled in “end-of-life” care without their knowledge, which can lead to the termination of life-saving or preventative treatments.
“Hospice declares that they are terminally ill. It discontinues the treatments they need for preventative care,” said Kaye Lynn Wootton, president of the National Association of Medicaid Fraud Control Units.
“If they don’t even know they’re in hospice, essentially, their health care plan has been changed just because somebody is trying to defraud Medicaid,” Wootton added.
By Sylvia Xu
