Eliminating Waste, Fraud, and Abuse in Medicaid My Administration has been relentlessly committed to rooting out waste, fraud, and abuse in Government programs to preserve and protect them for those who rely most on them. The Medicaid program was designed to be a program to compassionately provide taxpayer dollars to healthcare providers who offer care to the most vulnerable Americans. To keep payments reasonable, billable costs for such care were historically capped at the same level that healthcare providers could receive from Medicare. The State and Federal Governments jointly shared this cost burden to ensure those of lesser means did not go untreated. Under the Biden Administration, States and healthcare providers were permitted to game the system. For example, States “taxed” healthcare providers, but sent the same money back to them in the form of a “Medicaid payment,” which automatically unlocked for healthcare providers an additional “burden-sharing” payment from the Federal Government. Through this gimmick, the State could avoid contributing money toward Medicaid services, meaning the State no longer had a reason to be prudent in the amount of reimbursement provided. Instead of paying Medicare rates, many States that utilize these arrangements now pay the same healthcare providers almost three times the Medicare amount, a practice encouraged by the Biden Administration. These State Directed Payments have rapidly accelerated, quadrupling in magnitude over the last 4 years and reaching $110 billion in 2024 alone. This trajectory threatens the Federal Treasury and Medicaid’s long-term stability, and the imbalance between Medicaid and Medicare patients threatens to jeopardize access to care for our seniors. I pledged to protect and improve these important Government healthcare programs for those that rely on them. Seniors on Medicare and Medicaid recipients both deserve access to quality care in a system free from the fraud, waste, and abuse, that enriches the unscrupulous and jeopardizes the programs themselves. We will take action to continue to love and cherish the Medicare and Medicaid programs to ensure they are preserved for those who need them most. The Secretary of Health and Human Services shall therefore take appropriate action to eliminate waste, fraud, and abuse in Medicaid, including by ensuring Medicaid payments rates are not higher than Medicare, to the extent permitted by applicable law. This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person. DONALD J. TRUMP

MEMORANDUM FOR THE SECRETARY OF HEALTH AND HUMAN SERVICES THE ADMINISTRATORS OF THE CENTERS FOR MEDICARE AND MEDICAID SERVICES

SUBJECT: Eliminating Waste, Fraud, and Abuse in Medicaid

My Administration remains steadfast in its mission to eliminate waste, fraud, and abuse from government programs, ensuring they serve the individuals who depend on them the most.

The Medicaid program was originally established as a compassionate initiative, channeling taxpayer dollars to healthcare providers who care for America’s most vulnerable populations. To maintain reasonable payment levels, the costs for these services were historically capped to align with what healthcare providers could receive from Medicare. This collaborative financial structure between State and Federal Governments was intended to ensure that individuals with limited resources received necessary care.

However, under the Biden Administration, a troubling trend has emerged, allowing States and healthcare providers to exploit the system. For instance, certain States have implemented a “tax” on healthcare providers, only to return that same money to them as a “Medicaid payment.” This maneuver not only unlocks additional Federal funds for these providers but also allows States to sidestep their financial responsibilities toward Medicaid services. Consequently, rather than adhering to Medicare rates, many States are now reimbursing healthcare providers nearly three times the Medicare amount, a practice that has been encouraged by the current administration.

The use of these State Directed Payments has surged alarmingly, quadrupling over the past four years to an estimated $110 billion in 2024. Such a trajectory poses a significant threat to the Federal Treasury and the long-term viability of Medicaid. Moreover, the widening gap between the number of Medicaid and Medicare patients could ultimately compromise access to essential care for our seniors.

I have committed to safeguarding and enhancing these vital government healthcare programs for those who rely on them. Both seniors on Medicare and Medicaid beneficiaries deserve access to quality care in a system devoid of the fraud, waste, and abuse that enriches the unscrupulous at the expense of program integrity. We will take decisive steps to nurture and protect the Medicare and Medicaid programs, ensuring their preservation for those in need.

Therefore, the Secretary of Health and Human Services is directed to take appropriate measures to eradicate waste, fraud, and abuse within Medicaid, including ensuring that Medicaid payment rates do not exceed those of Medicare, to the extent permissible by law.

This memorandum is intended solely for informational purposes and does not establish any rights or benefits enforceable by any party against the United States or its agencies, officers, employees, or agents, or any other individual.

DONALD J. TRUMP