Executive Summary
- The U.S. Department of Health and Human Services Office of Inspector General Annual Report on Medicaid Fraud Control Units for Fiscal Year 2025 reveals continuing return on investment through recoveries far greater than the federal and state funds spent on these programs.
- Notably, criminal convictions increased by 3 percent over FY 2024, and criminal financial recoveries of $1.3 billion exceeded FY 2024 by as much as 35 percent.
- The strong financial incentive to pursue these programs, combined with other federal anti-fraud initiatives, creates a perfect storm for heightened regulatory and enforcement activity in 2026 and beyond.
The U.S. Department of Health and Human Services Office of Inspector General recently released its Fiscal Year 2025 Annual Report (the “OIG Report”) (here), along with a one-page summary of report highlights (here). The 53 Medicaid Fraud Units (each an “MFCU”) are established in each of the 50 states, as well as in the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. These Units investigate and prosecute Medicaid provider fraud and patient abuse or neglect, using a combination of federal and state funds.
The OIG Report notes that MFCUs recovered $4.64 for every $1 spent in FY 2025, and collectively had 1,185 convictions in the same time frame, which is a 3 percent increase over convictions in FY 2024. Moreover, 900 individuals or entities were excluded from federal health care programs in FY 2025, with 674 civil settlements and judgments. Combined, the MFCUs recovered over $2 billon in FY 2025—i.e., $706 million in civil recoveries and $1.3 billion in criminal recoveries. The $1.3 billion in criminal recoveries marks a significant 35 percent increase over criminal recoveries in FY 2024.
Personal care service attendants had the highest number of fraud convictions in FY 2025 (326). Nurses and nurses’ aides were the top two types of providers convicted of patient abuse or neglect in FY 2025. As for civil settlement and judgments, the most prevalent categories of defendant providers were pharmaceutical manufacturers (121), clinical labs (95) and retail pharmacies (91). By dollar amount, the entities with the largest civil recoveries were hospitals ($154 million), followed by pharmaceutical manufacturers ($121 million) and clinical labs ($112 million).
Along with the publication of the OIG Report, HHS simultaneously published raw data in Excel format on its website (here). This sortable data lists, for each of the 53 MFCUs: (1) the total number of open investigations by end of FY 2025 (15,921), of which most are fraud investigations (12,902), and a minority are patient abuse and neglect investigations (3,019); (2) total criminal indictments by end of FY 2025 (1,453), of which most are fraud indictments (1,060), and a minority are patient abuse and neglect indictments (393); and (3) total convictions by end of FY 2025 (1,185), of which most are fraud convictions (856), and a minority are patient abuse and neglect convictions (329).
Notable regions include Ohio, with the largest number of open investigations (1,058); and Pennsylvania, with the largest number of total convictions (115).
The OIG Report is an important measuring stick for the federal government and states in convicting or entering into settlements with those parties negatively impacting Medicaid programs around the country. The federal government and states commit hundreds of millions of dollars in resources and personnel in an effort to detect and prosecute fraud.
The OIG Report comes on the heels of increased federal attention to healthcare fraud, including several initiatives of the Trump Administration announced on a virtual monthly basis this yar. These include the January 2026 announcement of the establishment of a new National Fraud Enforcement Division within the U.S. Department of Justice,[1] the February 2026 announcement of the halting of about $250 million in federal Medicaid payments to Minnesota due to allegations of fraud in that state,[2] the March 2026 establishment by Executive Order of the Task Force to Eliminate Fraud chaired by Vice President Vance,[3] and the April 2026 issuance, by Acting Attorney General Todd Blanche, of a memorandum relating to the establishment of the new National Fraud Enforcement Division.[4]
Meanwhile, the federal Centers for Medicare and Medicaid Services (“CMS”) released a request for information (“RFI”) as part of proposed future Comprehensive Regulations to Uncover Suspicious Healthcare (the “CRUSH”). The Summary to the CRUSH RFI, as set forth in the Federal Register, states that the RFI “solicits stakeholder feedback on potential regulatory changes that might be included in a potential upcoming CRUSH proposed rule, as well as other programmatic changes that could be implemented to make CMS more effective in crushing fraud to protect taxpayer dollars and the Americans we serve.”[5]
The record fraud recoveries noted above, combined with the federal government’s focus upon fraud, waste, and abuse, portend a perfect storm of heightened regulatory and enforcement scrutiny. We anticipate that FY 2026 statistics will reflect the results of this more rigorous enforcement environment. The regulated community should therefore review the adequacy of existing compliance protocols.
Saul Ewing attorneys regularly counsel clients—including both entities and individuals—in structuring business arrangements that comply with federal and state fraud and abuse statutes and regulations and, when necessary, work with clients to defend against allegations of improper practices.
Bruce D. Armon is the Chair of the Healthcare Practice at Saul Ewing LLP. He counsels clients on how federal and state health care laws affect health care providers and businesses.
Justin C. Danilewitz is the Chair of the White Collar & Government Enforcement Practice at Saul Ewing LLP. A former Assistant U.S. Attorney, he represents healthcare institutions, medical practice groups, and physicians in government investigations.
1.https://www.whitehouse.gov/fact-sheets/2026/01/fact-sheet-president-donald-j-trump-establishes-new-department-of-justice-division-for-national-fraud-enforcement/
2.https://www.cnn.com/2026/02/25/politics/trump-vance-minnesota-medicaid
3.https://www.whitehouse.gov/presidential-actions/2026/03/establishing-the-task-force-to-eliminate-fraud/
4.https://www.justice.gov/opa/pr/acting-attorney-general-todd-blanche-issues-memorandum-creation-national-fraud-enforcement
5.https://www.federalregister.gov/documents/2026/02/27/2026-03968/request-for-information-rfi-related-to-comprehensive-regulations-to-uncover-suspicious-healthcare
