Title: Preventing Fraud in Medicare Description: Medicare is the biggest spending area for the U.S. government and the largest federal health program. Due to the sheer size of Medicare, there are risks of fraud. We'll talk with GAO's Leslie Gordon to find out about efforts to detect and prevent this fraud. Related work: GAO-26-107799, Medicare: CMS's Use of Data Analytics to Identify and Prevent Fraud Released: April 2026 [ START ] { Music } [ Leslie Gordon: ] Medicare is a huge target for fraudsters and new schemes are coming up all the time. [ Holly Hobbs: ] Welcome to GAO's Watchdog Report, your source for fact-based, nonpartisan news and information from the U.S. Government Accountability Office--I'm your host, Holly Hobbs. Medicare is the biggest spending area for the U.S. government and the largest federal health program. In 2024, Medicare spending was more than $1 trillion for health care services for tens of millions of older and disabled Americans. Due to the sheer size of Medicare, there are risks of fraud. We'll talk with GAO's Leslie Gordon to find out about efforts to detect and prevent this fraud. Leslie, thanks for joining us. [ Leslie Gordon: ] Good morning, Holly. It's good to be here. [ Holly Hobbs: ] How big of a problem is fraud in Medicare? [ Leslie Gordon: ] Medicare is a target for fraud. There's $1 trillion going out the door every year under the Medicare program. And that draws in fraudsters looking to make a buck. There aren't any reliable estimates of fraud right now. However, in the most recent years, CMS has reported that it prevented about $12 billion in potentially fraudulent payments going out the door. Let me give some examples. So, in terms of billing, we know that fraudsters are buying legitimate health care companies just for the Medicare billing privileges and then billing for billing for things that are never delivered. We also know that Medicare beneficiary IDs can be stolen, or a telemarketer can call a Medicare beneficiary and convince them to give up that information. And it often targets specific services that are new or have ambiguous guidance or just are a little easier to misrepresent. A recent targeted service has been high reimbursement skin substitutes. And this is because they are new. There's really unclear coverage requirements. And some people were saying, 'oh, let's just bill for this higher cost thing even though we're not really delivering it.' And, CMS has taken steps to redefine what is legitimate billing for skin substitutes. [ Holly Hobbs: ] Has anybody ever been caught defrauding Medicare? [ Leslie Gordon: ] All the time. A few years back, there was a $4 billion scheme that 15 providers were involved in to bill for urinary catheters that were never delivered to beneficiaries. Medicare actually stopped and suspended the payments to those providers when it saw what was happening. And the money didn't go out the door in that case. There's also a recent case in 2025, where a Florida man was indicted, sent to prison for 12 years for having billed for $27 million worth of durable medical equipment that was never delivered. [ Holly Hobbs: ] So the Centers for Medicare and Medicaid, they oversee spending for Medicare. What are they doing about this fraud? [ Leslie Gordon: ] CMS has a lot of activities to prevent fraud. They're doing things that prevent unlawful people from being enrolled in the Medicare program. They are also looking at claims they'll pull medical records and review claims before they pay, and after they pay to look for things. Our report looked at the data analytics side. How is CMS using data to identify potentially fraudulent payments early on? They use data analytics to look for billing spikes, to look for where providers are out of line with their peers. They also look for peer networks that might be unusual, a look for unusual geographic associations. They also do risk scoring of providers to identify those that might be higher risk because they're new or for other factors. CMS is also using machine learning, so they're using AI on unstructured data to identify anomalous or unusual billing practices. Again, to flag things that just look strange and need further investigation. We went and talked to private sector organizations as well to find out, 'hey, is Medicare on par?' And we found out that yes, the private sector is using similar tools to what Medicare is using, and Medicare is on par with the private sector. [ Holly Hobbs: ] So during our review, CMS started a new effort to identify fraud. Can you tell us about that? [ Leslie Gordon: ] Sure. Back to the catheter fraud scheme that I mentioned, CMS stopped those payments by suspending the providers. Most individuals on Medicare also have a medigap or supplemental insurance to cover their out-of-pocket expense--sometimes around 20% of the bill. And when CMS suspends payments, the supplemental payer does not know that CMS has suspended the payment. It looks like it just went through and got paid. So in that catheter fraud scheme, the Medigap or supplemental payers were seeing the claims pass through and some of them were also paying out on that. During the course of our work, we talked to CMS about communication with those supplemental payers, and starting in December of 2025, they started notifying supplemental payers when they suspend a provider's payments. And they're doing this on an ongoing basis to prevent that money going out the door from the Medicare beneficiaries and their supplemental payers. [ Holly Hobbs: ] This is a big issue, and we're going to keep looking at it. Can you tell us a little bit about our ongoing work? [ Leslie Gordon: ] Absolutely. We are looking at how well CMS has employed and used a fraud risk management strategy. That's forthcoming. We're also looking at how feasible it might be to estimate fraud in the Medicare program. [ Holly Hobbs: ] And last question--what's the bottom line of this report? [ Leslie Gordon: ] Medicare is a huge target for fraudsters and new schemes are coming up all the time. But CMS is using sophisticated analytics to identify and stop the fraud in real time. [ Holly Hobbs: ] Lesley, thanks for your time. [ Leslie Gordon: ] My pleasure. Thank you. { Music } [ Holly Hobbs: ] And thank you for listening to the Watchdog Report. To hear more podcasts, subscribe to us on Apple Podcasts. And make sure you leave a rating and review to let others know about the work we're doing. For more from the congressional watchdog, the U.S. Government Accountability Office, visit us at GAO.gov. [ END ]