During an interview on CNN’s “State of the Union,” Russell Vought, the administration’s director of the Office of Management and Budget, framed Medicaid as sagging under the weight of improper payments.
An “improper” payment refers to payments made erroneously to beneficiaries and their providers or without sufficient documentation.
Pressed June 1 by CNN host Dana Bash about concerns that low-income Americans would suffer if the bill becomes law, Vought called such arguments “totally ridiculous.”
“This bill will preserve and protect the programs, the social safety net, but it will make it much more commonsense,” Vought said. “Look, one out of every $5 or $6 in Medicaid [payments] is improper.”
That would mean Medicaid’s improper payment rate is 16% to 20%.
In a 2024 report covering the years 2022, 2023, and 2024, Medicaid’s parent agency — the Centers for Medicare & Medicaid Services — said the rate was about 5.1%.
One conservative group, the Paragon Health Institute, said the agency has been using an incomplete calculation method and that the percentage could be as high as 25%. Other experts told PolitiFact that the actual numbers could be higher than what the federal government reports, although not as high as Paragon’s estimate.
The White House did not respond to an inquiry for this article.
How High Is the Medicaid Improper Payment Rate?
Medicaid and its closely related Children’s Health Insurance program provides health care and long-term care to roughly 83 million lower-income beneficiaries, accounting for about one-fifth of health care spending overall. It is funded through a mix of federal and state money and is administered by states under federal government rules.
Every year, the Centers for Medicare & Medicaid Services publishes official numbers for the share of improper Medicaid payments, and in other federal health insurance programs the agency oversees.
In a 2024 review of payments made in 2022, 2023, and 2024, the agency found that 5.09% of Medicaid payments totaling $31.10 billion were improper.
The 5.09% rate represented a decrease from the 8.58% rate cited in its 2023 report, which was also based on a three-year time span. The 2024 figure represented the third consecutive annual decline.
Are These Numbers Complete?
In March 2025, Brian Blase, a conservative health policy analyst and president of Paragon Health, a health policy think tank, co-authored a report that said the official CMS improper payment rate figures were unrealistically low for eight of the past 10 years, because in some years the agency failed to undergo widespread auditing of its beneficiaries’ Medicaid eligibility.
From 2017 to 2019, during Trump’s first term, Blase served as Trump’s special assistant for economic policy. Before that, he served as a health policy analyst for the Senate Republican Policy Committee and has worked for the Heritage Foundation, a conservative think tank.
The report said if the agency’s analysis had looked at eligibility checks every year, more ineligible beneficiaries and payments on their behalf would have been discovered. The report said this might have increased the improper payment rate as high as 25%, based on the rates found in 2020 and 2021, when a high number of eligibility checks were included in the agency’s methodology.
However, it’s hard to confirm whether lack of eligibility auditing caused higher improper payment rates in 2020 and 2021, said Jennifer Wagner, director of Medicaid eligibility and enrollment at the Center on Budget and Policy Priorities, a liberal think tank.
Wagner said Medicaid enrollment procedures have fluctuated, which could help explain the higher rates in some years rather than others. Using two years of data to generalize about trends across a decade, she said, is not necessarily valid.
Robert Westbrooks, the federal Pandemic Response Accountability Committee executive director who worked in government oversight roles during Democratic and Republican administrations, told PolitiFact it’s plausible that the officially reported improper payment rates for Medicaid could be too low.
However, Westbrooks said pinpointing how much higher the rate is in reality is a speculative process. “I don’t believe anyone can credibly quantify the [difference],” he said.
What Is an Improper Payment?
Health care experts emphasized that improper payments are not the same thing as waste, fraud, or abuse.
CMS maintains official definitions for these terms:
- Fraud: “When someone knowingly deceives, conceals, or misrepresents to obtain money or property from any health care benefit program.”
- Waste: “Overusing services or other practices that directly or indirectly result in unnecessary costs to any health care benefit program. Examples of waste are conducting excessive office visits, prescribing more medications than necessary, and ordering excessive laboratory tests.”
- Abuse: “When health care providers or suppliers perform actions that directly or indirectly result in unnecessary costs to any health care benefit program,” which can include overbilling or misusing billing codes.
By contrast, an improper payment “includes any payment to an ineligible recipient, any payment for an ineligible good or service, any duplicate payment, any payment for a good or service not received, and any payment that does not account for credit for applicable discounts,” KFF, a health information nonprofit that includes KFF Health News, wrote this year.
“Although all fraudulent payments are improper, not all improper payments are fraudulent,” said Jessica Tillipman, associate dean for government procurement law at George Washington University’s law school. “Most providers identify the improper payments and return them knowing how aggressively enforced” the legal provisions are. “When they don’t, they open the door to significant liability.”
CMS said about 79% of improper payments happened when there was insufficient documentation.
This typically involved cases in which a state or provider missed an administrative step, and it did not necessarily indicate fraud or abuse, the agency said. Instead, it could be an accidental oversight or mistake.
In other words, it was rare for ordinary beneficiaries to be scamming the government. “The vast majority of fraud in Medicaid is committed by providers or other actors, not enrollees,” Wagner said.
Our Ruling
Vought said that “one out of every $5 or $6 in Medicaid [payments] is improper.”
The official improper payment rate calculated by the Centers for Medicare & Medicaid Services in 2024 was about 5%, smaller than the 16% to 20% rate Vought described.
A health policy analyst and former Trump adviser said methodological shortcomings in the agency’s analysis could mean the rate is as high as 25%. Although it’s possible the rate is higher than the 5% the government reported, how much higher is speculative.
The statement contains an element of truth but ignores critical facts, namely the federal government’s own data. We rate the statement Mostly False.
Our Sources
Russell Vought, interview with CNN’s “State of the Union,” June 1, 2025.
Centers for Medicare & Medicaid Services, “Fiscal Year 2024 Improper Payments Fact Sheet,” Nov. 15, 2024.
Centers for Medicare & Medicaid Services, “PERM Error Rate Findings and Reports,” accessed June 4, 2025.
Centers for Medicare & Medicaid Services, “2024 Medicaid & CHIP Supplemental Improper Payment Data,” accessed June 4, 2025.
Paymentaccuracy.gov, “Annual Improper Payments Datasets,” accessed June 3, 2025.
KFF, “5 Key Facts About Medicaid Program Integrity — Fraud, Waste, Abuse and Improper Payments,” March 18, 2025.
KFF, “Virtual Event Transcript — The Health Wonk Shop: Understanding Fraud and Abuse in Medicaid,” April 24, 2025.
Paragon Health Institute, “Medicaid’s True Improper Payments Double Those Reported by CMS,” March 3, 2025.
Government Accountability Office, “Improper Payments: Information on Agencies’ Fiscal Year 2024 Estimates,” March 11, 2025.
Email interviews with Tammie Smith and Craig Palosky, spokespersons for KFF, June 2, 2025.
Email interview with Jennifer Wagner, director of Medicaid eligibility and enrollment at the Center on Budget and Policy Priorities.
Email interview with Jessica Tillipman, associate dean for government procurement law at George Washington University’s law school, June 3, 2025.
Email interview with Robert Westbrooks, Pandemic Response Accountability Committee executive director who worked in government oversight roles during Democratic and Republican administrations, June 3, 2025.
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.Subscribe to KFF Health News' free Morning Briefing.
This article first appeared on KFF Health News and is republished here under a Creative Commons license.
