Protecting the American Dream: Restoring Accountability and Combating Fraud in Safety Net Programs

Overview

The revelation of widespread fraud and abuse within our country’s essential safety net programs and the ensuing news coverage in the final months of 2025 have brought attention to the epidemic fraud in state Medicaid and other public benefit programs nationwide. Although these schemes are epidemic across the country, and ongoing investigations will likely expose more fraud than is currently known, Minnesota serves as a key example, exposing how billions in taxpayer-funded benefits continue to be misused, in large part due to the lack of effective investigation and enforcement. In particular, the decentralized management, lenient reimbursement rules, limited auditing, and compliance-focused enforcement create an inordinate number of opportunities for abuse. Fraud networks have exploited these weaknesses for years, consistently using the same beneficiaries and providers, among other nefarious activities (De Rugy, 2026). Such fraud undermines public benefit programs for the very Americans whom these programs are intended to help.

Any state without unified data sharing, routine unannounced inspections, strict liability for false claims, and automatic handling of high-risk cases is at risk. However, states already have significant power to tackle these issues. Restoring integrity calls for a move from reactive reforms to enforcement focused on prevention. This toolkit outlines executive and legislative actions that governors and state officials can take to protect beneficiaries and secure taxpayer funds.

State Executive Actions

State Actions Policy #1:

Interstate Cooperative Agreements for Data Sharing, Reporting, and Block-Grant Plans

Good-government organizations have exposed and documented fraud networks that exploit the absence of meaningful coordination between states by operating across multiple jurisdictions. They have also revealed shifting activities to states with inadequate oversight measures. More recent fraud tactics have outpaced states' methods to detect fraud and exploit the fact that state-by-state enforcement without shared information creates significant gaps (Blase, 2025).

To prevent jurisdiction shopping and inconsistent enforcement, states should adopt uniform interstate enforcement frameworks that eliminate information silos. These agreements should include the sharing of state provider enrollment records with other states, ownership disclosures, exclusion and termination lists, beneficiary participation data, and unusual billing patterns.

Interstate cooperation allows states to identify the most active multi-state fraud schemes, which include the proliferation of so-called "cross-border providers" and "beneficiary recycling." Many states have implemented cooperation and information sharing programs that other states would do well to replicate. The states in the chart below already provide a pattern for cooperation through formal interstate agreements for law enforcement, child support enforcement, and professional licensing. Some have strong programs to identify fraud and share related information with agencies in other states.

While not exhaustive, the following table presents examples of initiatives that states are already undertaking and which could be implemented through executive action elsewhere.

Table 1

State Programs Supporting Interstate Data Sharing and Medicaid Fraud Enforcement

State	Method of Interstate Collaboration Prevention
Arizona	Works with neighboring states to verify beneficiaries' residency and eligibility, focusing on border regions with these states to reduce duplicate or improper benefit claims (AZ Health Care Cost Containment System (AHCCCS), 2025a).
Florida	Shares evidence of Medicaid fraud and responsible parties with neighboring states (FL Agency for Health Care Administration, 2026).
Georgia	Shares provider licensing and disciplinary actions to prevent terminated providers from re-enrolling under new entities in other states (GA Department of Community Health, 2026).
Ohio	Participates in working groups with other states to align Medicaid audits to help identify abnormal billing trends across state lines (Ohio Auditor of State, 2024).
Texas	Has multi-state data sharing arrangements to cross-check Medicaid provider enrollment and exclusion lists (TX HHS, 2022).

These states participate in Medicaid program integrity activities, including provider exclusion sharing, ownership disclosure, beneficiary eligibility verification, and multi-state fraud investigations.

These programs are not universal, nor is there a uniform method for states to share this information. For states with working arrangements, these existing mechanisms should be expanded to include shared databases, reciprocal reporting obligations, coordinated audits, and joint enforcement triggers. Other states can directly extend Medicaid and block grant oversight without new statutory authority (Office of the National Coordinator for Health Information Technology, 2017). Sharing information across states can materially increase the likelihood of detection and ensure that fraud networks cannot evade accountability simply by operating across state lines.

State Action Policy #2:

Unannounced Inspections of Program Facilities and Recipients at Least Once a Year

When state agencies maintain regularly scheduled inspection schedules, fraudsters have advanced notice to fabricate documents and even stage operations. Unannounced verification has proven highly effective against typical Medicaid schemes such as document falsification and the identification of false facilities, thereby allowing improper payments to accumulate (Schneider, 2025). Indeed, Medicaid offices already have inspection authority and governors may require unannounced inspections as a condition of participation in taxpayer funded programs (US HHS-OIG, 2024) and should do so at least once a year.

During unannounced inspections, the inspectors should confirm that the facilities are fully operational, verify that legitimate and credentialed staff are present, and ensure consistency between the claims billed and the services provided at the facility. Material discrepancies would trigger payment suspensions, clawbacks, provider exclusions, or referral for enforcement (Hall Render Killian Heath & Lyman, P.C., 2024).

The following states have already implemented policies that align well with these goals.

Table 2

State Programs Supporting Interstate Data sharing and Medicaid Fraud Enforcement

State	Unannounced Inspections and Program Integrity Enforcement
Arizona	Conducts unannounced provider and facility inspections through AHCCCS, program integrity to verify eligibility, service delivery, and operational compliance (Arizona Auditor General, 2012; Arizona Attorney General, n.d.).
Florida	Uses surprise inspections and field investigations through "the Agency for Health Care Administration (AHCA) the Medicaid Fraud Control Unit" to identify non-operational facilities and phantom services (Florida Agency for Health Care Administration, 2024).
Georgia	Performs surprise inspections and audits through the Department of Community Health Office of Inspector (GA Department of Community Health, 2026).
Ohio	The Attorney General’s Health Care Fraud Section conducts unannounced compliance reviews and site visits in coordination with Medicaid program integrity units (Ohio Department of Medicaid, 2024; Centers for Medicare & Medicaid Services, Center for Program Integrity, 2019).
Texas	The Health and Human Services Commission Office of Inspector General conducts unannounced provider inspections and site visits to verify service delivery and billing accuracy (Centers for Medicare & Medicaid Services, Center for Program Integrity, 2025).

This table provides examples of state actions using unannounced inspections to identify non-operational facilities, verify service delivery, and support payment suspensions, clawbacks, and provider exclusions.

Already, states like those in the chart above have implemented more frequent and unpredictable surprise inspections to close the gap between misconduct and detection while creating a stronger deterrent to staged compliance.

State Action Policy #3:

Develop a Single, Publicly Accessible Platform for Data, Whistleblower Reports, and Alerts

When agencies do not exchange information regarding complaints and enforcement data, fragmented intake and tracking can delay the identification of recurring billing and fraudulent patterns. This lack of coordination has permitted repeat misconduct and multi-program abuse to continue (US HHS-OIG, 2025).

Governors have the authority to direct Medicaid agencies to coordinate their findings with the enforcement agencies in their states. Examples of these agencies’ existing work include existing whistleblower hotlines, inspection records, and enforcement outcomes. States should work to integrate this information into fewer or even a single platform (Lexis Nexis Risk Solutions, 2025).

Making greater use of technology, states should establish a centralized platform responsible for complaint intake, consolidating inspection findings, and tracking enforcement actions. Artificial intelligence could be trained to generate a risk index based on known fraud patterns. Accessible reporting and coordinated case tracking make fraud harder to conceal and would make enforcement against fraud less divided between agencies and work toward a coordinated enforcement system (Codoxo, n.d.).

The following states have instituted programs for centralization that others could readily replicate.

Table 3

Centralized State Programs for Integrity and Oversight of Medicaid

State	Centralized Reporting and Program Integrity Platforms
Arizona	Consolidates fraud reporting, compliance monitoring, and enforcement data through the AHCCCS Program Integrity systems (AHCCS, n.d.).
Florida	The Attorney General and AHCA operate reporting portals to coordinate tracking to support Medicaid fraud detection (FL Office of the Attorney General, n.d.).
Georgia	The Department of Community Health tracks audit findings and enforcement actions. It operates as a centralized hub for this information (US HHS-OIG, 2021).
Ohio	The Attorney General's Health Care Fraud Section works with federal Medicaid program-integrity units to coordinate enforcement and compile referrals (OH Attorney General, 2025).
Texas	The Health and Human Services Commission Office of Inspector General centralizes fraud complaints, audit activity, and enforcement coordination (Centers for Medicare & Medicaid Services, Center for Program Integrity, 2025).

This table provides examples of state actions using centralized platforms to receive fraud reports and support timely escalation and enforcement in Medicaid programs.

Centralized Medicaid fraud reporting accelerates detection and enforcement, especially if states make greater use of technology and automation. States should take greater steps to centralize information on all aspects of Medicaid fraud, including inspection results and prior enforcement actions.

State Action Policy #4:

Require Automatic Fraud Referrals to Federal Enforcement Authorities

The Office of the Inspector General for the U.S. Department of Health and Human Services (HHS) found that 10% of the 337 Medicaid plans nationwide made no referrals to federal enforcement agencies in 2022 for provider fraud or abuse. Of the plans that did make referrals, “more than half made only two or fewer referrals per 10,000 enrollees in 2022” (Vardanyan, 2025).

Instead of leaving referrals to the discretion of hundreds of plan administrators, governors should immediately require plans to report suspected fraud, particularly in the most common cases, such as double billing and bogus facilities.

Governors should establish thresholds to identify suspected fraud that remove any discretion in referring to federal agencies. These thresholds should include significant suspected losses as well as fraud that impacts multiple benefit programs. Referrals should also trigger inspections and audits.

Ensuring timely federal involvement in suspected Medicaid fraud cases also gives states access to federal investigative tools and increases the likelihood of recovery and prosecution. Increased federal involvement and ensuing prosecution will likely serve as a deterrent for future fraud. Note also that the Temporary Assistance for Needy Families (TANF) statute already requires states to inform the “Immigration and Naturalization Service” (now the Department of Homeland Security [DHS]) of anyone they know is not lawfully present in the United States (42 U.S.C. § 608(g), 2024). Consistent with this requirement, states should also implement a uniform referral policy mandating that any applicant flagged through the SAVE (Systematic Alien Verification for Entitlements) program whose immigration status cannot be verified be promptly reported to the DHS.

The table below lists states that mandate federal referrals for suspected Medicaid fraud and coordination with the appropriate federal agencies.

Table 4

Mandatory Federal Referrals and Enforcement Coordination

State	Automatic fraud referrals to federal enforcement authorities
California	Coordinates referrals between state program-integrity units and federal enforcement authorities for complex Medicaid fraud investigations (DHCS, n.d.-a).
Florida	Coordinates automatic referral of qualifying Medicaid fraud investigations through the Attorney General’s Medicaid Fraud Control Unit for federal review and prosecution support (Fla. Stat. § 409.913(2), 2024).
New York	New York's Office of the Medicaid Inspector General (OMIG) must refer all potential provider fraud cases to federal, state, or joint investigations (Centers for Medicare & Medicaid Services, Center for Program Integrity, 2025).
Ohio	Upon detecting credible allegations of fraud, the State Medicaid agency must refer the matter for investigation and potential prosecution (OH Admin. Code 5160-1-29).
Texas	The Texas Health and Human Services Commission’s Office of Inspector General (HHSC-OIG) investigates Medicaid fraud and, upon finding indicators of criminal activity, refers these cases to the Attorney General’s Medicaid Fraud Control Unit (OAG-MFCU) and other federal partners like the DOJ for prosecution (TX HHS, n.d.-b).

The above table provides examples of state actions using centralized platforms to receive Medicaid fraud reports and support timely enforcement.

State Action Policy #5:

Hold High-Risk Providers, Subgrantees, and Local Agencies Accountable

Much of the fraud in federal block grant programs occurs at the provider, subgrantee, and local agency levels. For example, Minnesota’s childcare fraud was able to proliferate not just because the Biden Administration allowed states to bill for childcare enrollment instead of attendance, but also because Minnesota allows all but two counties to qualify providers and administer their childcare programs, largely independent of federal oversight. The further funding is from the original source (in the case of block grants, that source would be the federal government), the less oversight and accountability there will be. For starters, well-run states should not usurp their direct oversight authority of distributed funds to poorly run cities and counties (U.S. Department of Health and Human Services, 2026). As an example, a program run by the state of Georgia is more likely to be responsible and accountable for managing federal funds than the City of Atlanta.

Other actions that states can take to strengthen oversight and accountability include establishing formal criteria for designating high-risk providers, subgrantees, and local agencies, thus linking fiscal oversight to program performance. Repeated audit findings of mismanagement, weak documentation, questionable spending increases, and failures to meet statutory performance standards should automatically trigger a designation as a “high-risk” entity and result in enhanced oversight, including:

1. Pre-payment review, which is sometimes known as “Defend the Spend;”
2. More frequent reporting;
3. Increased on-site monitoring (noted above);
4. Time-limited participation in programs; and
5. Empowering the state with administrative discretion and streamlined flexibility to cancel grants and contracts, in addition to the ability to recoup and freeze funds (Fiori & Seigel, 2018😉.

Performance failures such as low TANF work participation rates or repeated Child Care and Development Fund (CCDF) health and safety violations are just two of many performance measures that states should use to strengthen their oversight of block grant recipients. States should also apply risk-based oversight principles to beneficiary eligibility, particularly in programs with high exposure to improper payments. In the Supplemental Nutrition Assistance Program (SNAP), households reporting zero income have an elevated risk profile and should be subject to more frequent recertification intervals, such as quarterly or every four months, rather than the standard annual certification period. Shortened certification cycles in these cases provide additional opportunities to verify continued eligibility, reduce prolonged improper payments, and reinforce program integrity without imposing uniform burdens across all participants.

The following table provides examples of mechanisms certain states employ to oversee Medicaid contractors and monitor potential fraud.

Table 5

Enhanced Oversight of High-Risk Providers, Subgrantees, and Local Administrators

State	Oversight Mechanism
Arizona	AHCCCS identifies high-risk providers and managed care entities through program-integrity reviews, imposing pre-payment review, on-site monitoring, payment suspension, and administrative sanctions where warranted (AHCCCS, 2024).
Florida	Authorizes enhanced oversight of Medicaid providers and contractors with repeated audit deficiencies, including mandatory corrective action plans, intensified monitoring, suspension of payments, and recovery of improperly used funds (FL Office of Program Policy Analysis & Government Accountability, 2014).
Georgia	Georgia’s Department of Community Health applies heightened scrutiny to providers and subgrantees with compliance failures, linking fiscal oversight to performance outcomes and empowering the state to impose sanctions, exclusions, and contract termination (GA Department of Community Health, n.d.).
North Carolina	Employs centralized oversight of subgrantees and local administrators of federally funded programs, using audit findings and performance metrics to escalate monitoring, restrict funding, and enforce corrective actions when misuse or mismanagement is detected (Ahmadi, 2024).
Texas	The Texas HHS-OIG designates high-risk Medicaid providers and contractors based on audit findings and utilization patterns, triggering prepayment reviews, payment holds, enhanced reporting, and referrals to enforcement authorities (TX HHS-OIG, 2025).

These examples illustrate how states use various risk-based designations, fiscal controls, and performance-linked oversight to hold providers and subgrantees accountable for the use of federal and state funds.

State Action Policy #6:

Expand Cross-Program Data Sharing to Detect Duplicate Participation and Fraud

Improper payments often result from individuals receiving overlapping benefits across multiple programs without coordination. While other federal matching programs, such as the national clearinghouse, provide periodic interstate data comparisons, they are not integrated eligibility clearinghouses and do not offer state agencies real-time alerts. Developing unified or integrated eligibility systems across TANF, CCDF, SNAP, Medicaid, housing assistance, and other benefits would allow for regular cross-program eligibility sweeps to identify improper overlap and provide agencies with knowledge of benefit suspensions in other programs (Congressional Research Service, 2026). Expanding cross-data program sharing could, then, lead to more timely detection of duplicate participation and inconsistent reporting than what is currently provided through federal programs.

Cross-program data sharing will enable states to identify fraud cases and improper payment claims that cannot be detected through a single program. The fraud takes the form of duplicate participation in programs, inconsistent income levels reported to the system, false claims about household composition, and submission of incompatible benefit claims. The current system runs independently for Medicaid and other public benefit programs and does not necessarily alert the authorities to these issues (Medicaid Food Security Network, 2023).

Another potential benefit of the integrated system is improved enforcement speed and consistency. When an individual's benefits are terminated or suspended under one program, this detail should be displayed by all agencies involved within a relatively short period. Alerts generated by these systems can serve as triggers for verification checks, temporary stops, and redeterminations before any improper payment occurs. This system minimizes the role of discretion and delays resulting from manual referrals.

States can also enhance their cross-program oversight by conducting internal audits through their inspectors general or program integrity units by utilizing these integrated data systems. Once states have identified unusual patterns of program participation, their Offices of Inspector General (OIGs) can conduct audits to verify eligibility, documentation, and provider information. Regular internal audits would allow states to identify fraud and systemic weaknesses across programs. Additionally, the integration of audit capabilities with states’ data matching activities thus enables a more robust system of oversight that includes verification and enforcement.

Finally, states should prohibit any form of self-attestation for material eligibility criteria wherever federal law permits in Medicaid. This information would include collecting immigration status information at the various points of service where such information is obtained, including in emergency room settings. They should implement and enforce work requirements using independently verified data, ensuring that individuals who do not meet eligibility conditions such as income, household composition, age, and residency are promptly identified and transitioned off the program. Limiting self-attestation reduces opportunities for misrepresentation at the point of entry and strengthens overall program integrity.

The following table notes cross-program data sharing programs already employed by certain states that could be implemented elsewhere.

Table 6

Cross-Program Data Sharing to Detect Duplicate Participation and Fraud

State	Data Sharing Mechanism
Arizona	ACCCHS centralizes eligibility and data-matching tools that connect Medicaid with wage and public assistance datasets, allowing near real-time identification of conflicting eligibility indicators (Medicaid and CHIP Payment and Access Commission, 2018).
Florida	Employs integrated eligibility systems and interagency agreements to share enrollment, income, and participation data across Medicaid, SNAP, and TANF, supporting routine eligibility sweeps and coordinated enforcement actions (Florida Agency for Health Care Administration, 2023).
Georgia	Coordinates data sharing across Medicaid and human services programs to surface overlapping benefits and inconsistent reporting, with automated referrals for redetermination or enforcement where discrepancies appear (Kramon, 2025).
North Carolina	Operates integrated eligibility and financial oversight systems that align Medicaid, SNAP, and other public benefit program data, enabling cross-program eligibility checks and automated flags for inconsistent income and household information (Center for Health Care Studies, 2023).
Texas	Uses cross-agency data matching between Medicaid, SNAP, unemployment insurance, and wage records to identify duplicate participation and trigger verification or suspension workflows across programs (Mookerjee, 2022).

The above are examples of states that have various eligibility systems and interagency data sharing programs to detect overlapping benefits and improper payments, among other common fraud tactics.

State Legislative Actions

State Action Policy #7:

Reforms to Medicaid and Block Grant Plans

State lawmakers should take advantage of the prerogative that federal law already grants them to change Medicaid payment rates, ensuring that high-risk providers submit to structural changes, such as pre-payment audits, or face lower reimbursements. Lower reimbursement rates can also be applied during probationary periods for providers found to be in non-compliance with established billing practices, provided their activity is not fraudulent.

Lawmakers should also consider statutory changes to billing standards that standardize practices in line with the accounting practices used by private health insurance companies. These reforms should incentivize providers by offering higher reimbursement rates for adopting these practices or, if they refuse, relegating them to lower tiers. Identifying those who resist should subject them to greater scrutiny and flag them as being high risk.

In 2025, the One, Big, Beautiful Bill (Pub. L. No. 119–21, 2025) mandated reforms to Medicaid eligibility that specifically seek to address common Medicaid schemes. Arguably, the most prominent reform is stricter oversight and more frequent redetermination of Medicaid eligibility. Program administrators now have to reevaluate whether recipients aged 11-64 meet income thresholds every six months (Brillman, 2025). This change is especially important given that ineligible individuals are often maintained on Medicaid rolls as their income and financial situations change (Statescoop, 2025). Other reforms include work requirements and reducing reimbursement for administrative costs by half from 50% to 25%  (Burns et. al., 2025). States should build upon these reforms in statute and enforce them aggressively.

Below are examples of states that legally subject providers to adjusted or reduced payments and other requirements until they reach compliance with established practices.

Table 7

Mandatory Federal Referrals and Enforcement Coordination

State	Tiered Medicaid Reimbursement and Enhanced Oversight of High-Risk Providers
Arizona	Authorizes AHCCCS to classify providers by risk tier, require corrective action plans, and impose pre-payment review or reduced payment velocity for providers failing compliance benchmarks but not yet referred for fraud enforcement (AHCCCS, 2023; A.R.S. § 36-2930.05 ).
Florida	Permits the AHCA to place providers on probationary status, require pre-payment review, and enhance scrutiny for non-compliant billing practices not rising to the level of fraud (Hahn Saperstein & Hood, 2025; FL Code 409.913).
Georgia	Requires the Department of Community Health to subject non-compliant providers to enhanced review and conditional payment status, as well as a tiered level of oversight based on the reimbursement process (Silver Rubinger & Callahan, 2026; GA R&R 111-3-9).
Ohio	Provides authority to impose progressive provider sanctions, including increased documentation requirements, prepayment review, and modified conditions of reimbursement for providers with repeated billing deficiencies until full compliance is achieved (Oneida Health, 2024; Ohio Admin. Code r. 3901-8-11).
Texas	Authorizes the state HHS Commission to impose pre-payment review and payment holds on high-risk providers and to impose temporary payment reductions or suspensions during periods of corrective action (TX HHS, 2024; 1 TX Admin Code 371.29).

The above table provides examples of state measures that use Medicaid rate-setting authority to enforce provider compliance with administrative standards.

State Action Policy No. 8:

Establish a Single Statewide Entitlement Fraud Enforcement Unit with Statewide Jurisdiction

In most states, entitlement fraud enforcement is fragmented across disparate, often siloed agencies. It can thus be difficult for these agencies, each responsible for different aspects of Medicaid administration, to see and synthesize all of the clues that might point to potential fraud. For example, an agency inspector general provides administrative oversight. Medicaid Fraud Control Units (MFCUs), which investigate and prosecute criminal Medicaid fraud and are often housed within a state attorney general’s office, operate separately from licensing boards (which oversee professional certification and discipline).

 (Centers for Medicare & Medicaid Services, 2014).

A single statewide entitlement fraud agency would address this fragmentation by unifying the different authorities and tools that the separate agencies have to address fraud. Several proposals have been considered for at least a decade, with the Centers for Medicaid Services (CMS) proposing a never-enacted rule change in 2016, which would facilitate states consolidating these various authorities. The CMS identified the key authorities for combating fraud, namely civil recovery, provider suspension, and forensic accounting. The agency would also coordinate criminal referrals for Medicaid fraud with state MFCUs (Centers for Medicare & Medicaid Services, 2016).

The states noted below employ centralized authorities to detect Medicaid fraud.

Table 8

Existing Centralized Entitlement-Fraud Enforcement Units in the States

State	Example of Unified Authority to Address Medicaid Fraud
Arizona	AHCCCS-OIG has statewide jurisdiction for investigating fraud, conducting forensic financial examinations, suspension of providers, as well as referrals to state and federal prosecutors (AHCCCS, 2026; A.R.S. §§ 36-2918, 36-2918.01).
California	Centralized system for Medicaid fraud and program integrity through its Department of Health Care Services and MFCU authority, allowing for statewide investigation and payment suspension capabilities (DHCSCHDS, n.d.-b; CMS, 2011; CA W&I Code 14043.6 & 14123).
Florida	The Florida MFCU and the AHCA operate under statutory schemes that centralize statewide Medicaid fraud investigations and also combine forensic accounting and compliance activities. These agencies then coordinate administrative sanctions with criminal enforcement (FL Office of the Attorney General, n.d.; Fla. Stat. § 16.59, 2024).
New York	The OMIG has jurisdiction over audits, recovery, provider exclusion, and the referral of criminal cases to state and federal prosecutors (D ’Allaird, 2024; 18 NYCRR 515.3).
Texas	The TX HHS-OIG has statewide jurisdiction and a centralized fraud intake. In its statutory toolbox are forensic accounting capabilities, the power to hold payments, suspend providers, and make criminal referrals to the Attorney General and federal agencies (TX HHS, n.d.-a; TX Gov Code 544.001).

The above table provides examples of state enforcement structures with statewide jurisdiction over entitlement fraud investigations and provider sanctions.

State Action Policy No. 9:

Require Provider Ownership Transparency and Conflict-of-Interest Disclosure

Fraud rackets have also been identified and allowed to persist by using complex ownership structures involving shell corporations, and other means like false identities to conceal the identities of care providers receiving government money. As a result, providers who may have previously been banned from Medicaid due to fraud or abuse can re-enter the program through new ownership and resume their fraudulent practices (US DOJ, 2025).

Making use of the existing authority that federal law already permits states, lawmakers should condition participation in Medicaid based on full disclosure of ownership and control beyond the federal requirements to impose increased disclosure requirements and impose additional conditions. Among the more robust disclosures that should be required are the following:

1. Beneficial Ownership: Medicaid participants should identify all individuals or entities with direct or indirect ownership. Those with significant financial interests should also be identified.

1. Continual Reporting: Upon changes to essential information concerning ownership, providers should be responsible for updating ownership.
2. Conflict of Interest Disclosures: Providers should be required to disclose financial or other professional relationships with contractors (Office of Inspector General-US HHS, 2016).

While federal law already requires many of these disclosures, states would do well to increase their frequency and level of detail, as noted above. Increasing transparency into ownership exposes the most common techniques fraudsters use to perpetrate Medicaid fraud, such as so-called provider recycling and the same owners controlling multiple Medicaid participants. Doing so allows regulators to more readily identify common control across multiple providers and, from there, potentially link financial flows and billing patterns to the repeat perpetrators (Masood, 2025).

Just as importantly, more stringent disclosure requirements and increased transparency act as a deterrence to providers misrepresenting their ownership, which has proven a major lacuna in identifying fraud perpetrators. Requiring full transparency in ownership and conflict of interest

disclosure ensures that payments will only go to providers willing to operate with clear and enforceable accountability and that those who have engaged in fraudulent activity are denied status as Medicaid providers by using different names.

The table below provides examples of states that have enacted increased disclosure requirements related to ownership and conflict of interest.

Table 9

Provider Ownership Transparency and Conflict of Interest Disclosure

State	Legal requirements for disclosure of ownership and conflict of interest
Arizona	Mandates disclosure of beneficial ownership and control for AHCCCS providers and imposes penalties and exclusion for fraud (AHCCCS, 2012; A.R.S. § 36-2930.05).
California	Requires Medi-Cal participants to disclose ownership and related parties and employs inter-agency review with licensing and enforcement agencies to prevent re-entry. The state program is authorized to exclude participants with prior program violations (CA DHCS, 2005; CCR Title 22, § 51466).
Florida	Requires Medicaid providers to report any 5% controlling interest and changes in ownership. It also authorizes denial or termination of enrollment where ownership information is concealed or misrepresented (HHS Office of Inspector General, 2016; Fla. Stat. § 409.901).
New York	Requires detailed ownership (at 5% controlling interest) and managing employee disclosure for Medicaid providers. The general public is allowed open access to this owner’s information. Providers who have been sanctioned and their successor entities may be excluded (NY Dept. of Health, 2023; N.Y. Comp. Codes R. & R. Tit. 18 § 502.4).
Texas	Requires disclosure of ownership and managing employees as a prerequisite for Medicaid enrollment and revalidation. State agencies coordinate ownership and sanction information to prevent the reenrollment of recycled providers (TX HHS, 2024; 1 Tex. Admin. Code § 371.1005).

This table highlights representative states whose practices require disclosure of ownership and control of providers. Some address the exclusion of repeat offenders who may disguise their interest or re-enter Medicaid as a successor entity.

State Action Policy No. 10:

Establish Strict Liability for Fraud and Material Misrepresentation in Federally Subsidized and Block-Grant Programs Administered by the State

State-run benefit programs are often abused through sham documents and false claims that do not always require proof of intent to prosecute. Yet an enforcement regime that relies on intent for civil liability allows for the abuse of complex administrative procedures and the use of plausible deniability to perpetuate it (Eisner Gorin LLP, n.d.). To address these gaps, the law should provide for a “strict liability” enforcement regime for Medicaid providers in which intent would be unnecessary to impose civil liability, including payment suspension and debarment for false claims.

Strict liability would entail increased damages for substantial misrepresentation and automatic clawbacks. For repeat offenders and serious cases, it should also exclude participation in Medicaid and other public benefit programs. Strict liability has the potential to shift the paradigm for Medicaid fraud by focusing on fraud prevention rather than remediation. Knowing that intent is not necessary for civil punishment may also encourage participants to make greater use of internal controls, such as better record-keeping and the adoption of formal accounting methods.

States can also verify that providers are billing for legitimate services by implementing real-time service verifications. These verifications would involve targeted controls for high-risk providers, such as time-stamped confirmations or geolocation-based check-ins. Already, federal law requires “Electronic Visit Verification” for personal care and home healthcare to verify service, provider, patient, location, and time. These and other unpredictable verification methods could be adopted more broadly to reduce fraud and the likelihood of staged compliance while not overly burdening compliant providers (California Department of Social Services, n.d.).

To better steward the trust that the federal government places in states with its resources via block grants, states should take more steps to ensure integrity over these dollars. State governments and human services agencies should take every measure to be good stewards of federal dollars and treat federal block grant funds as their own. Indeed, rampant fraud in Minnesota and elsewhere does not occur in a vacuum. Rather, much of the individual level fraud is the result of a lack of concern by state level employees on the front end and a disinterest in providing program integrity for programs funded outside of state tax dollars.

Below is a list of general recommendations states can enact to help states ensure limited federal funds are provided to eligible individuals and families states:

1. Require regular training for state-level employees overseeing eligibility verification on eligibility requirements related to immigration status, income, family composition and other metrics to ensure only those legally eligible for federally funded programs are receiving benefits.
2. Explicitly look to hire individuals who will take a critical eye towards determining eligibility for benefits.
3. Require routine eligibility redeterminations at regular intervals (quarterly, biannually, or annually) for TANF, CCDF, LIHEAP and related programs and not just at recertification.
4. Require agencies to run every applicant through the SAVE program and not just individuals who volunteer non-citizen status.
5. Implement cross-program data matching with wage records, unemployment insurance data, SNAP, Medicaid, SSA, and child support enforcement systems.
6. Establish automated termination or suspension protocols for cases that fail verification. (U.S. Government Accountability Office, 2015).

The following table provides examples of representative states whose laws impose strict liability for civil penalties related to Medicaid or other public benefit programs:

Table 10

Strict Liability Civil Enforcement for Public Benefit Programs

State	Strict-Liability Requirements for Civil Penalties
Arizona	Statutes authorize AHCCCS to impose civil liability, payment suspension, exclusion, and recovery for false or misleading claims arising from any improper payment determination without requiring proof of intent (AHCCCS, 2025b; A.R.S. §§ 36-2903.01, 36-2918, and 36-2932).
California	Medi-Cal laws allow for civil penalties, overpayment recoveries, and exclusions based on false and unsupported claims, and these laws do not have intent as a required element (Cal. Gov’t Code § 12650(b)(3), 2013).
Florida	State law permits strict civil liability for false claims and overpayments in Medicaid and other state run public benefit programs, including recoupment and administrative sanctions without any requirement of criminal intent (Fla. Stat. § 409.913, 2021).
New York	Statutes governing Medicaid allow for civil recovery, exclusion, and penalty for false and misleading claims without requiring intent. Instead, it only requires acting with "reckless disregard" or "deliberate ignorance.” The law authorizes the Office of Medicaid Inspector General to take action for improper payments alone (N.Y. State Fin. Law, Article 13, §§ 187-194).
Texas	Allows for recoupment, payment suspension, and termination for improper Medicaid claims and materially inaccurate records, without regard to intent, which places compliance risk on all providers and contractors (1 Tex. Admin. Code § 354.1451).

This table highlights representative state frameworks that impose civil liability and administrative sanctions for improper claims without requiring proof of intent, thereby reinforcing strict liability enforcement in taxpayer-funded programs.

Conclusion

These policy recommendations offer states a workable and enforceable set of tools to effectively steward the Medicaid and safety-net programs in question, especially in this new era of highly sophisticated, organized fraud operations that have exploited fragmented oversight models. At the same time, these reforms send a clear message regarding the non-delegable duties that individuals must abide by when participating in taxpayer financed benefits systems, especially the safety net resources intended to help the most vulnerable Americans.