Wyden and Merkley Sidestep Documented Scale of Fraud Accuse Trump of Attacking Medicaid

Oregon — U.S. Senators Ron Wyden (D-OR.) and Jeff Merkley (D-OR.) released a strongly worded statement accusing the Trump administration of conducting a “phony crusade against fraud.” They argued that recent federal actions serve as a disguise to undermine Medicaid programs, particularly Home and Community-Based Services (HCBS), which millions of Americans rely upon for safe and independent living. The senators emphasized that the administration is not targeting genuine fraudsters but instead cutting vital funding essential for seniors, people with disabilities, and children.

The letter, directed to President Donald Trump, Vice President JD Vance, HHS Secretary Robert F. Kennedy Jr., and CMS Administrator Dr. Mehmet Oz, was co-signed by Senators Tammy Duckworth (D-Ill.), Kirsten Gillibrand (D-N.Y.), Chuck Schumer (D-N.Y.), Angela Alsobrooks (D-Md.), Bernie Sanders (I-Vt.), and Cory Booker (D-N.J.). It highlighted the deferral of $259 million in Medicaid funds to Minnesota and preliminary inquiries sent to four other states. The senators warned that these steps could force vulnerable individuals into more expensive nursing homes, increase overall taxpayer costs, and lead to the closure of compliant home care agencies operating on narrow margins.

The Minnesota Funding Deferral

On February 25, 2026, the Centers for Medicare & Medicaid Services announced the deferral of $259.5 million in federal matching funds for Minnesota’s fourth-quarter fiscal year 2025 expenditures. This action addressed approximately $243.8 million in unsupported or potentially fraudulent claims, along with $15.4 million related to beneficiaries lacking satisfactory immigration status. The deferral focused on high-risk areas with unusually rapid spending growth, including personal care services and other HCBS. Minnesota officials have challenged the measure in court, while a corrective action plan has been submitted and remains under review.

Scale of Documented Medicaid Fraud and Improper Payments

Federal data reveal substantial concerns regarding fraud, waste, and abuse in Medicaid, particularly within decentralized HCBS and personal care services. The HHS Office of Inspector General’s Medicaid Fraud Control Units (MFCU) Annual Report for Fiscal Year 2025 documented 1,185 convictions, including 856 for fraud and 329 for patient abuse or neglect. Personal care services attendants accounted for the highest number of fraud convictions. Overall, MFCUs secured nearly $2 billion in combined criminal and civil recoveries, delivering a return of $4.64 for every dollar invested by states and the federal government.

In June 2025, the Department of Justice coordinated a major health care fraud takedown that charged 324 defendants with schemes involving more than $14.6 billion in alleged losses, many of which implicated Medicaid.

CMS further reported a national Medicaid improper payment rate of 6.12 percent for FY 2025, corresponding to an estimated $37.39 billion. Of these improper payments, approximately 77.17 percent resulted from insufficient documentation.

Context in Minnesota

Investigations in Minnesota have drawn particular attention. Federal prosecutors have estimated that a significant portion, potentially half or more, of approximately $18 billion billed since 2018 across 14 high-risk Medicaid programs, including personal care, autism, and housing stabilization services, may involve fraud. This suggests possible losses exceeding $9 billion, with dozens of individuals charged in related cases. The federal deferral directly responds to these documented vulnerabilities in high-risk service categories.

Broader Implications and Evaluation

The senators’ press release accurately conveys their objections and the roster of co-signers. At the same time, it gives limited attention to the extensive federal evidence of fraud and improper payments that prompted the administration’s actions. The Trump administration has described its initiatives as a shift toward proactive detection through data analytics, moving beyond traditional “pay and chase” recovery methods.

While legitimate concerns exist regarding potential disruptions to access and impacts on compliant providers, the available data from HHS-OIG, DOJ, and CMS indicate that program integrity issues in Medicaid—especially in HCBS—are both real and substantial. Effective oversight requires balancing fraud prevention with continued support for eligible beneficiaries.

As of April 1, 2026, Minnesota’s corrective action plan continues under implementation, and program-integrity reviews in other states remain ongoing. Final outcomes will depend on the success of reforms and additional audits.

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