By Gerry Scharfenberger
At a recent Assembly Budget hearing, the State Comptroller, in her opening statement matter-of-factly said that her office uncovered a staggering $225 million in Medicaid/Medicare fraud during 2025.
This is in addition to $30.8 million in fraud separate from the comptroller is the Medicaid Fraud Control Unit in the AG’s office for a total of $255.8 million. The comptroller has also identified over $1.1 billion of Medicaid fraud since 2016, about 70% of which has been since 2022. Keep in mind, this is just the fraud that was caught.
Then there is the fraud that has been identified in other states with such high-profile instances in Minnesota, California and Illinois among the most egregious. Minnesota and California reported fraud totaling $9 billion and $1.4 billion, respectfully while Illinois reported a whopping 382% increase in fraud from 2023 to 2025. Again, all of the investigations in these states are ongoing, so these numbers will invariably increase over time.
Conversely, you have many governors publicly bemoaning the so-called “cuts” to Medicaid and Medicare. In reality, these are nothing more than expanded eligibility requirements and increased oversight of taxpayer dollars. It also forces states to be more vigilant in identifying fraud and recovering illegally gotten payments.
At $16.15 billion, New Jersey is fourth in Medicaid spending, trailing only New York, California and Massachussetts. At that level of spending, these states become irresistible targets for large scale fraud. Some of the perpetrators are highly organized, sophisticated organizations including providers, clinics and even organized crime networks.
The most common methods of engaging in Medicaid/Medicare Fraud include:
– Billing for services not provided
– Falsifying records or timesheets
– Double billing or overbilling
– Misrepresenting patient eligibility
– Collusion or coercion
Some of the large-scale fraud syndicates actually create bogus companies that provide zero services and bill Medicaid directly, pocketing the entire payment.
There is, however, some good news. There are record levels of Medicaid/Medicare fraud prosecution with cooperation between all levels of law enforcement including international organizations. The 2026 National Health Care Fraud Takedown, an initiative created by the U.S. Department of Justice (DOJ) has thus far charged 455 defendants, including 90 licensed medical professionals, for schemes involving over $6.5 billion in false claims and significant patient harm.
To date, this is the largest in DOJ history and likely represents just the tip of the proverbial iceberg. It also shows a concerted effort by the federal government to recover stolen taxpayer dollars, keep providers honest and most important, destroy organized healthcare syndicates, the latter often extending beyond our borders. According to Dr. Mehmet Oz, Centers for Medicare and Medicaid Services administrator, “over half of the whistleblower tips that we get are for healthcare fraud and over half of the fraud against our government is in healthcare.”
The lesson to be learned from this is simple – way too much of our bloated government is the result of spending that ends up in the hands of criminals.
Many of these nefarious individuals are American citizens; however, a disturbing and growing number are foreign,or part of a foreign criminal network designed to rip off American government programs. Case in point; of the 92 people arrested in Minnesota and charged with fraud, 82 were Somalian.
While the federal government appears to be doing its part, it’s clear that states need to step up, do more, and become ever more aggressive in rooting out corruption and fraud in government programs. This calls for increased enforcement, tougher penalties on criminals, stricter sentencing guidelines and expanded claw back efforts.
Only then will we deter criminals from fleecing the taxpayers through the sophisticated scams that cost us all billions of dollars.
