CMS Administrator Dr. Mehmet Oz has put governors on notice, ordering a rapid review of high-risk Medicaid providers to cut down on fraud and reclaim taxpayer money for the people who need it most. States have tight deadlines to commit to revalidation plans and to outline two-year strategies aimed at flushing out abusive actors. This push comes amid major fraud cases and audits that have exposed widespread vulnerabilities in state Medicaid systems.
Washington is pressing states to act quickly, and the message is clear: clean up your rolls or face increased scrutiny. Oz gave governors ten business days to say whether they will carry out an immediate revalidation of providers deemed high risk, and a separate 30-day window to present a broader provider-revalidation strategy. That timeline raises the stakes for state leaders who have tolerated lax oversight for too long.
“Corrupt individuals and organizations masquerading as health care providers are defrauding Medicaid, and American taxpayers, of billions of dollars each year, placing valuable resources out of reach for those the program was intended to serve: low-income senior citizens, children, and disabled individuals. Classes of providers with less rigorous [enrollment standards]…” This quote was part of the letter telling governors why the revalidation is urgent. The language makes the purpose obvious: protect taxpayers and restore trust in a program meant for vulnerable Americans.
Beyond the immediate revalidation push, states must submit a two-year plan detailing how they will verify provider legitimacy and compliance. CMS asked for methodologies for off-cycle revalidation targeting providers without National Provider Identifiers and other high-risk groups. Plans must include measurable metrics and public reporting so results are not hidden behind bureaucratic language.
“While the factors contributing to fraud are multifaceted and require a comprehensive approach to address, a revalidation process for high-risk providers will immediately deter criminal actors from continuing their fraud schemes, as the federal and state governments closely review and scrutinize the qualifications of providers to suspend or terminate clearly abusive actors from the program,” Oz wrote. That sentence spells out enforcement as the immediate response, not another study or a soft fix.
CMS specifically told states to include providers operating without NPIs and those with weaker enrollment and billing checks. The agency wants consistency across fee-for-service and managed care systems, and oversight of managed care directories. Coordination with law enforcement is required so investigations can move from paperwork to prosecutions when the evidence supports it.
“Failure to [commit to the revalidation plan] will be considered as we evaluate the likelihood of fraud in each state moving forward,” Oz stated. The federal government is signaling that noncompliance could trigger consequences such as funding deferrals. That threat already surfaced in conversations about several states, and it is intended to push governors and Medicaid directors into action.
The crackdown follows high-profile schemes that laid bare how badly systems can be exploited, including Minnesota’s major Feeding Our Future fraud and broader reviews that flagged billions in questionable payments. A state-commissioned review estimated as much as $1.7 billion in improper payments over four years in one state alone, numbers that demand a forceful response. Those scandals have made anti-fraud enforcement a political and fiscal priority at the federal level.
Proposals submitted by states must include timelines for off-cycle revalidation, metrics to measure progress, processes for ongoing verification of provider information, and strategies to ensure provider data accuracy across systems. They must also explain how they will report progress publicly and cooperate with law enforcement partners. These requirements are designed to create accountability where lax checks once allowed abuse to flourish.
“Our analysis of national trends strongly suggests a persistent and growing Medicaid threat posed by sophisticated actors knowingly exploiting these complex systems for financial gain,” Oz wrote. Plainly put, the problem is not small or accidental, and treating it as such will only cost taxpayers more. Governors now have a chance to show leadership by tightening enrollment standards and ensuring Medicaid serves the needy rather than fraudulent schemes.
States facing the strongest scrutiny include large programs with known vulnerabilities, and federal officials have floated the idea of deferring Medicaid funds if states fail to act. That prospect has sparked pushback in some places, but the core message remains straightforward: stop the theft or lose resources. For taxpayers and beneficiaries, the choice could not be clearer.
