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As DOGE Works, Evidence Of FWA Emerges

Even as Democrats excoriate Elon Musk and the Department of Government Efficiency (DOGE) commission for its far-reach and tactics, more word is coming out about the depth of improper payments made through Medicare and Medicaid. While the estimate is down since the COVID pandemic, a new report says there was $88.5 billion in improper payments in 2024, more than 5% of outlays last year.

A Centers for Medicare and Medicaid Services (CMS) fact sheet says improper payments from federal programs can include payment errors or fraudulent payments but most often involve insufficient or missing documentation in reporting by states, providers, or contractors.

My view: fraud, waste, and abuse (FWA) is much higher. Latest estimates suggest FWA is more like 25% of all healthcare costs, up from a traditional 10% norm used before.  That would mean FWA accounts for over $1 trillion in the entire healthcare system. With Medicare and Medicaid closing in on $2 trillion, that is about $500 billion a year in these programs.

DOGE efforts have met some injunctions in federal court, but President Trump reiterated his support for the evaluation process so as to reduce wasteful spending.

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#medicare #medicaid #medicareadvantage #managedcare #trump #doge #spending

https://www.modernhealthcare.com/politics-policy/hhs-cms-improper-payments-2024

Molina Reports Mixed Financial News

Medicaid-dominant insurer Molina Healthcare had its net income grow 8.1% to $1.2 billion in 2024 as revenue spiked 19.3% to $40.7 billion. For the fourth quarter, net income rose 16.2% to $251 million as revenue increased 16% to $10.5 billion.

But like other insurers, Molina struggled with medical expenses and had an 89.1% medical loss ratio (MLR) in 2024, one percentage point higher than in 2023. Membership expanded by 10.8%. Molina expects Medicaid spending to increase by 4.5% in 2025, but thinks cost pressures will ease. Molina sees growth and financial success in 2026 and beyond with new state Medicaid awards and success on bidding in existing states.

Molina Healthcare CEO Joe Zubretsky downplayed attempts by Republicans to gut or limit Medicaid in upcoming reconciliation bills. He thinks any cuts will be marginal. See my blog this week on the topic: https://www.healthcarelabyrinth.com/will-medicaid-and-the-affordable-care-act-see-huge-cuts/ .

Additional articles: https://www.healthcaredive.com/news/molina-earnings-q4-2024-medicaid/739391/ and https://www.fiercehealthcare.com/payers/medicaid-cuts-washington-will-be-marginal-says-molina-healthcare-ceo

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#medicaid #managedcare #molina #margins

https://www.modernhealthcare.com/finance/molina-healthcare-medicaid-costs-cuts-2025

Elon Musk Targeting CMS and Medicare

Elon Musk and his Department of Government Efficiency (DOGE) commission is now targeting the Centers for Medicare & Medicaid Services (CMS) as part of efforts to reduce spending and waste. In particular, Musk is targeting Medicare for fraud, waste, and abuse (FWA).

The DOGE representatives have gained access to payment and contracting systems.

In other news, the hospital lobby is petitioning President Donald Trump to grant carveouts for medical devices and pharmaceutical products for tariffs. China is a large exporter of such products.

As well, Democratic lawmakers are asking the Trump administration why some federal financial assistance recipients still aren’t receiving funds after two judges froze the spending freeze.

Additional article: https://www.modernhealthcare.com/politics-policy/elon-musk-doge-fraud-medicare-medicaid and https://www.beckershospitalreview.com/legal-regulatory-issues/doge-probes-cms-for-medicare-medicaid-fraud-wsj.html and https://www.fiercehealthcare.com/providers/hospitals-ask-trump-exempt-medical-pharma-products-tariffs and https://www.fiercehealthcare.com/regulatory/trump-admin-orders-temporary-pause-most-federal-financial-assistance

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#doge #fwa #cms #medicare #spending #tariffs #healthcare

https://www.fiercehealthcare.com/regulatory/labor-unions-sue-trump-admin-over-treasury-takeover-citing-privacy-concerns

Party-Line Vote Advances Kennedy To Senate Floor

Robert F. Kennedy, Jr. turned the vote of Sen. Bill Cassidy and gained a 14-13 Senate Finance confirmation vote, which means he has survived and will likely gain Senate confirmation. Cassidy gained concessions from the Trump administration in return for supporting Kennedy’s nomination.

Whether you agree with Cassidy’s decision or not, the articles show that Cassidy spent a great deal of time gaining procedural and other commitments in return for supporting Kennedy. The concessions empower the Senate healthcare policy committees in a major way. He deserves a great deal of credit here for taking his role to advice and consent seriously. Vice President JD Vance also played a major role in working with Kennedy and Cassidy.

Additional articles: https://www.modernhealthcare.com/politics-policy/rfk-jr-nomination-advanced-senate-finance-committee and https://www.medpagetoday.com/publichealthpolicy/washington-watch/114079 and https://thehill.com/homenews/senate/5125761-cassidy-says-he-secured-key-vaccine-commitments-from-rfk-jr/ and https://www.healthcaredive.com/news/rfk-jr-clears-key-hurdle-on-path-to-hhs-secretary/739096/ and https://insidehealthpolicy.com/health-insider/rfk-jr-confirmation-sent-floor-cassidy-onboard-budget-resolution-stalled

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#trump #rfkjr #hhs #congress #healthcare

https://www.fiercehealthcare.com/regulatory/top-republican-airs-concerns-about-rfks-bully-pulpit-and-vaccine-hesitancy

Trump Wants To Preserve Medicaid By “Loving And Cherishing It”

On Friday, President Donald Trump promised to “love and cherish” Social Security, Medicare, and Medicaid. Notice Medicaid made it to the earlier list of protected programs. Trump continued: “We’re not going to do anything with that unless we can find some abuse or waste. The people won’t be affected. It will only be more effective and better.” A sea change for Trump? Perhaps. But let’s not get too hopeful from one press statement.

See my blog today on some interesting developments on the healthcare front. Trends suggest healthcare cuts may not be as deep as once suspected during the budget reconciliation process: https://www.healthcarelabyrinth.com/will-medicaid-and-the-affordable-care-act-see-huge-cuts/

#medicaid #aca #obamacare #exchanges #trump #congress #budgetreconciliation

https://www.politico.com/live-updates/2025/01/31/congress/trump-love-and-cherish-medicaid-00201893

Second Judge Enjoins Trump Spending Freeze Indefinitely

President Trump’s spending freeze now has been indefinitely reversed by a second federal judge. The order was handed down late Friday. In the first case, a judge is to determine next week if a temporary injunction in the pause will be extended. Despite the rescinding of the Office of Management Budget (OMB) freezing certain spending, Democrats’ cases continued as Trump indicated the freeze is still on to ensure consistency with his executive orders that have been issued.

As I have noted, this is a clear misstep by the new administration. The cases will likely weigh in on the issue of whether the executive branch is obligated to execute spending directed by the legislature and signed into law.

#trump #congress #spending

https://www.fiercehealthcare.com/regulatory/trump-admin-orders-temporary-pause-most-federal-financial-assistance