On June 25, 2025, the Office of the Inspector General (“OIG”) of the U.S. Department of Health and Human Services (“HHS”) released a short video containing the highlights of the Medicaid Fraud Control Units (“MFCUs”) Annual Report for Fiscal Year 2024 (“2024 Annual Report”).

While the 2024 Annual Report was released in March 2025, HHS OIG just released the two-minute video summarizing the key aspects of the report.

MFCUs—which investigate and prosecute statewide Medicaid provider fraud, and beneficiary abuse and neglect—recovered $1.4 billion in FY 2024, which equates to $3.46 for every $1 spent. Criminal recoveries were the highest amount in the past 10 years, $961 million, and more than double the rolling 5-year average. HHS OIG attributes this massive increase to the California MFCU, which recovered $513 million on its own.

Medicaid Fraud Control Units

Overseen by the HHS OIG, MFCUs conduct statewide investigations and prosecutions, usually within a state attorney general’s office. In 2024, 53 MFCUs operated in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

MFCUs bring both civil and criminal cases. Fraud—such as billing a state Medicaid program for services, drugs, or supplies that are intentionally or knowingly unnecessary, not performed, overbilled, or not actually covered—is a primary area of focus.

FY2024 Annual Report

In FY 2024, MFCUs obtained 1,151 convictions (817 for fraud and 334 for patient abuse or neglect); $961 million in criminal recoveries; $407 million in civil recoveries; 493 civil settlements and judgments; and 1,042 exclusions of individuals and entities from federally funded programs due to MFCU convictions.

On the civil side, while the number of civil settlements and judgments increased slightly in 2024, there has been a downward trend in total civil recoveries which fell by more than half from 2023 in terms of amount recovered. In other words, the bringing of additional actions does not necessarily equate to increased recovery. And this is born out in the data where certain provider types account for a large volume of recoveries, but the dollar value netted by those recoveries is small. For example, pharmaceutical manufacturers accounted for the most civil settlements and judgments (76) by provider type, but only accounted for $14.2 million in actual recoveries. Retail pharmacists would be an exception, as they had the fifth highest number of civil settlements and judgments (22) but accounted for the second highest amount of civil recoveries ($60 million) just behind hospitals at $60.1 million.

Enforcement by provider is also interesting. Among convictions for fraud, 36 percent of providers were personal care service attendants, who assist Medicaid beneficiaries with activities of daily living (e.g., bathing, dressing, hygiene) in the beneficiaries’ home or community. Whereas convictions for patient abuse or neglect focused on nurses’ aides and nurses, which accounted for 40 percent of convictions.

Potential Medicaid Cuts and Impact on MFCUs

The One Big Beautiful Bill has the potential to impact MFCU enforcement. As the White House has stated, by “remov[ing] illegal aliens, enforc[ing] work requirements, and protect[ing] Medicaid for the truly vulnerable,” the bill “eliminat[es] waste, fraud, and abuse.” The June 29 Fact Sheet, in fact, cites “fraud” seven times in attempting to dispel rumors about the legislation. A reduction in fraud, waste, and abuse vis-a-vis the bill, however, may come at a cost to the MFCUs, and we might see continued decrease in the civil recoveries and criminal recoveries returning to the rolling 5-year average.

Takeaways

Health-care fraud, waste and abuse are key enforcement areas at both the state and federal level. Just recently we have seen a number of new enforcement actions at the federal level: 1) the Department of Justice’s (“DOJ”) June 24 announcement of a criminal conviction of a Florida man for a multimillion-dollar Medicare fraud scheme; 2) the DOJ’s June 23 unsealing of an indictment against two Florida men who allegedly schemed to steal more than $100 million from a nonprofit assisting people with special needs and disabilities; and 3) the DOJ’s June 23 announcement of a California man’s guilty plea in connection with a $16M hospice fraud scheme.

Yet based on the 2024 Annual Report, health care providers should not overlook investigations and enforcement at the state level—especially when investigations at both levels bring substantial returns to government coffers. This is likely to remain true despite the final resolution of One Big Beautiful Bill. If the 2024 Annual Report is any indication, state-level MFCUs will be investigating potential health care fraud just as closely as their federal counterparts, assuming they have the resources to do so—and compliance with all relevant fraud statutes will be essential.