Medicare and Medicaid move more than $1.7 trillion a year.4 Source 4, see sources page The records are split across programs, contractors, providers and states. A scheme can hide in the gaps between them.
Adolphus Law PLLC · Figures checked September 2026.
1. The size of the programs
Medicare and Medicaid cover about 40% of the U.S. population, with combined annual expenditures of more than $1.7 trillion.4 Source 4, see sources page In FY2023 the two programs represented 26% of federal program spending.8 Source 8, see sources page Medicare alone processed over a billion transactions that year.8 Source 8, see sources page
The Government Accountability Office has designated Medicare a high-risk program since 1990 and Medicaid since 2003, in part because of their complexity and their exposure to fraud.7 Source 7, see sources page,8 Source 8, see sources page
The difficulty is both size and fragmentation. No single observer sees every program, contractor, provider and state at once.
2. The size of the oversight budget
In FY2023, HHS OIG was responsible for overseeing more than $2 trillion in HHS expenditures. Its final budget that year was $432.5 million. In its April 2024 testimony the office described nearly 1,600 dedicated professionals. That budget is approximately two cents for every $100 of HHS spending.4 Source 4, see sources page
The FY2026 request describes an office of the same shape. It would support 1,479 full-time equivalents, and the office states plainly that the reach, range, and impact of its work are bound only by its resources.5 Source 5, see sources page It reports a return of $11 in expected recoveries and receivables for every $1 invested in it.5 Source 5, see sources page
In FY2023, HHS OIG reported $13.32 billion in expected recoveries, receivables and savings against a $432.5 million budget.
The reach, range, and impact of our work and accomplishments are bound only by our resources.
HHS OIG told Congress in April 2024 that its final FY2023 budget of $432.5 million was about two cents for every $100 of HHS spending, against more than $2 trillion in departmental expenditures overseen that year.4 Source 4, see sources page
3. What “improper payment” measures
CMS publishes annual improper-payment estimates. For FY2025 they were:
CMS improper-payment estimates, FY2025
Program
Estimated rate
Estimated improper payments
Medicare Fee-for-Service
6.55%
$28.83 billion
Medicare Part C
6.09%
$23.67 billion
Medicare Part D
4.00%
$4.23 billion
Medicaid
6.12%
$37.39 billion
CMS, Fiscal Year 2025 Improper Payments Fact Sheet.1 Source 1, see sources page The four estimates above add to $94.12 billion. That total is a sum of CMS's FY2025 improper-payment estimates for Medicare Fee-for-Service, Medicare Part C, Medicare Part D, and Medicaid. CMS does not publish a combined figure, and the sum excludes CHIP and the Advance payment of the Premium Tax Credit.
Improper payments are not fraud. CMS states that improper payment measurement is not a measure of fraud. An improper payment is a payment that did not meet program payment requirements. It can be an overpayment, an underpayment, or a payment where there was not enough information to tell.1 Source 1, see sources page
Of the FY2025 Medicaid estimate, 77.17% resulted from insufficient documentation, which CMS says is generally not indicative of fraud or abuse.1 Source 1, see sources page Most Part C improper payments were cases where a plan's supporting documentation did not substantiate the diagnosis data submitted for payment.1 Source 1, see sources page
The measurement record did not establish whether those sampled payments were proper. Missing or insufficient documentation leaves the question open; it is not itself proof of fraud.
4. CMS already uses statistical detection
CMS runs a Fraud Prevention System built on hundreds of models that monitor provider and supplier outlier billing, alongside automated edits that deny inappropriate billing patterns.6 Source 6, see sources page In calendar year 2025, CMS investigated 7,701 Medicare providers and suppliers for potential fraud, imposed 537 payment suspensions, revoked 5,586 providers and suppliers, and referred 372 matters accepted by law enforcement, encompassing $3.7 billion.6 Source 6, see sources page
GAO reports that for FY2022 through FY2024, CMS estimates it prevented $11.9 billion in potentially fraudulent Medicare payments through administrative action.7 Source 7, see sources page In one matter, data analytics helped identify 15 providers who allegedly billed Medicare more than $4 billion for urinary catheters that were never supplied. CMS suspended their payments and later revoked their enrollment.7 Source 7, see sources page
The published results show what model-based review can do inside CMS. Adolphus uses public and licensed records, without CMS's nonpublic data or administrative powers.
5. How schemes migrate
In 2019, a nationwide enforcement operation shut down a billion-dollar orthotic brace scheme. Medicare fee-for-service claims for those braces fell 9%. Claims to Medicare Advantage plans for the same types of braces rose 22%. The migration took weeks. In one instance, a supplier shut down for billing CMS opened a new company at the same address and began billing Medicare Advantage plans instead.4 Source 4, see sources page
From 2020 to 2023, durable medical equipment billing in Medicare Advantage rose 59%.4 Source 4, see sources page
HHS OIG has also described a shift toward bust-out schemes: open fast, bill a large volume of fraudulent claims, shut down before anyone notices. Some use straw owners and stolen beneficiary and physician identification numbers. Some buy a legitimate, enrolled supplier and redirect its payments. When one is detected, the next is already prepared.4 Source 4, see sources page
The brace example shows one way billing can move after enforcement. A review limited to the last payment channel can miss that shift.
After a 2019 enforcement action against an orthotic brace scheme, Medicare fee-for-service claims for those braces fell 9 percent. Claims for the same braces billed to Medicare Advantage rose 22 percent within weeks.4 Source 4, see sources page
6. Fragmented claims data
Claims in Medicare Advantage are submitted to plans directly rather than to CMS or its contractors. An individual plan can see only the slice of a scheme that is billed to it.4 Source 4, see sources page National Provider Identifiers for ordering providers are largely absent from managed care data, which HHS OIG says hinders the use of data analysis to detect patterns of inappropriate billing.4 Source 4, see sources page
The gap runs further than the plans. CMS did not share information about Medicare provider payment suspensions with supplemental payers until December 2025. Before that, some supplemental payers paid beneficiary cost sharing on potentially fraudulent claims. GAO found that state Medicaid agencies paid at least $196,000 in state and federal funds in cost sharing on the urinary catheter scheme in 2023 and 2024.7 Source 7, see sources page
GAO has also reported that CMS has not conducted a comprehensive fraud risk assessment for Medicare Advantage, and that its corrective action plans for that program are not sufficiently detailed.9 Source 9, see sources page
The pieces sit in separate public reports and datasets. The work is joining them without treating correlation as proof.
7. Why the private case exists
The False Claims Act permits a private relator with nonpublic information to bring a qui tam action on behalf of the United States, subject to the statute's limits.
In FY2025, settlements and judgments under the Act exceeded $6.8 billion, the highest single-year total in its history, and more than $5.7 billion of that involved health care. Whistleblowers filed 1,297 qui tam suits, the highest number in a single year, and the Department reported more than $5.3 billion in settlements and judgments from qui tam suits filed that year or earlier.2 Source 2, see sources page
Over the full record, from FY1987 through FY2025, total settlements and judgments were $85,652,583,093. Qui tam matters account for $60,972,925,646 of that.3 Source 3, see sources page
What the statute asks of a relator, and what it provides in return, is set out on the False Claims Act page.
8. What this argues for
A statistical signal shows where a question is worth asking; it cannot establish that anyone did anything wrong. The arithmetic above is the reason the question cannot be asked everywhere at once.
The sequence is concrete: read the rule, pull the record, test the innocent explanation, find the witness and plead the elements. That is the method.
Figures on this page are drawn from CMS, the U.S. Department of Justice, HHS OIG, and GAO. Each is listed with its full citation on the sources page. Improper-payment estimates are not estimates of fraud. Recoveries reported by the Department of Justice describe past enforcement by the United States. They are not a forecast of results in any matter and they are not results of this firm.
