Perhaps I am too cynical about government programs. Some states, apparently, are so good at running them that they never have a single instance of fraud or overpayment.
What relief! I was under the impression that, for instance, California is so poorly run that it is a minor miracle if any of the subsidies it dishes out reach the intended recipients. Yet I just learned it administers its programs perfectly.
Eight states reports NO Medicare/Medicaid fraud & NO overpayments? I mean come on... No, Oversight Isn't Happening https://t.co/VqdTRBOd3f
— Jake Novak (@jakejakeny) October 6, 2026
Eight states report zero fraud, and unlike Doctor Oz, I take these states at their word. Why would they lie? Who would doubt the bureaucrats in states like California, Michigan, Arizona, Iowa, New York, Pennsylvania, Utah, and Wisconsin? Only a madman, I say.
But apparently Doctor Oz is just such a madman, as he proved during the COVID pandemic, when he also distrusted the CDC, NIAID, and the FDA. Good thing Dr. Fauci froze him out of the discussions, lest he have gotten the ear of the president and killed grandmas around the country.
Another skeptic is Walter Curt, who insists we can go straight to evidence already collected in Michigan and implies that similar mechanisms that subvert accountability are at work in other states.
On Tuesday, Dr. Mehmet Oz, the administrator of the Centers for Medicare & Medicaid Services, named eight states whose Medicaid managed-care reports to Washington show zero fraud referrals and zero overpayments recovered. “How is that possible across states serving millions of Medicaid beneficiaries?” he asked. Michigan is one of the eight, alongside Arizona, California, Iowa, New York, Pennsylvania, Utah and Wisconsin. It has 30 days to answer. “Either the reporting is broken, or the oversight is,” Oz said. “We’re going to find out which.”
He can skip the month. The federal government answered his question in 2022, in two reports its own inspectors wrote after taking Michigan’s Medicaid fraud machinery apart link by link. What they found was a state that, at every point where somebody had to decide whether to enforce, decided not to.
Wait, wasn't that report done under Biden? And if so, why was nothing done? Surely the Biden administration and Kathy Whitmer's office worked closely together to ensure that everything was on the up and up, right?
Oz said the zeros “could be a sign of something far more serious, that oversight isn’t happening.” In Michigan the sign has a price tag. The state pays each health plan a set amount per member per month, and that amount is built from what the plans spent the year before. When a plan claws money back from a crooked provider, federal rules say that money has to come off next year’s bill. If the state counts zero recoveries, nothing comes off, and the plans get paid next year as though the fraud were real medical care. CMS warned Michigan about exactly this in 2022: without that accounting, “MHPs could be receiving inflated rates per member per month.” The insurers keep the money and the rates.
It is also the system under which, as Restoration News reported in April, 21 dissolved Michigan corporations kept billing Medicaid for a combined $118.8 million after the state’s own records showed them out of business, and roughly 80 Medicaid-billing entities shared a single Dearborn address. A chain that moves four referrals in three years is how that happens. Senate Republican Leader Aric Nesbitt and Rep. Jamie Thompson cited that reporting in May when they referred it to the Justice Department.
Oversight isn’t happening in Michigan. The federal government’s own inspectors said so four years ago, in reports that sat on a shelf while the state told Washington there was nothing to report. Oz gave Lansing 30 days to find out which is broken, the reporting or the oversight. In Michigan it is both, and it was before he asked.
Because the feds pick up 75 percent of the tab, the incentive to ferret out fraud is relatively low, especially because much of that money flows to recipients who also happen to be close to the party infrastructure. In theory, as in Hawaii, the federal government can punish the states for failing to exercise oversight, but this is, shall we say, not a commonly used option.
Then there is the fact that the federal government relies on the state bureaucracies, which actually run the programs, to do their job. Sure, the feds can swoop in and investigate if something is obviously off, but in practice, the federal government is in no position to continually audit the programs. The states run them, and they're supposed to do the heavy lifting.
After all, the feds are sending them many billions of dollars. It isn't such a hard lift given the resources.
But states want the money, not the responsibility, and for the most part that is what they get. If the path of least resistance is to see no evil, no evil will be seen. And if the incentives are to actually allow fraud on a massive scale, as we have seen in Minnesota and California, and likely other states, fraud is what you will get.
Some level of fraud is inevitable, and at some point the cost of rooting it out to the last dime becomes more expensive than simply minimizing it as much as practical. The juice has to be worth the squeeze, as many businesses know when doing inventory. There will always be breakage, but there could also be embezzlement or grotesque irresponsibility, and looking for those is imperative.
Or at least should be. Obviously, many government officials think differently.
Editor’s Note: The 2026 Midterms will determine the fate of President Trump’s America First agenda. Republicans must maintain control of both chambers of Congress.
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