WASHINGTON, D.C. – Ways and Means Committee Chairman Jason Smith (MO-08) delivered the following opening statement at a hearing on Protecting Patients and Taxpayers: Cracking Down on Medicare Fraud.
As prepared for delivery.
“When the Medicare program was created, it was intended to provide affordable health insurance to Americans over the age of 65. Medicare was a promise that Americans will be able to get the care they need when they need it. Now, Medicare is one of the largest programs in the federal government, totaling over $1 trillion annually. Medicare is not a handout. It is a benefit earned by Americans who worked their whole lives, paid into the system, and played by the rules. We must ensure it is there for them when they need it.
“That’s why the reports of the ongoing theft health care benefits by fraudsters, illegal immigrants, and even transnational criminal organizations that have come to light in recent months are so shocking.
“Videos by citizen journalists in Gavin Newsom’s California show people hiding the dirty conditions of neglected or wholly non-existent facilities, all while driving away in luxury vehicles and refusing to answer questions. How can it be that these journalists keep finding hospice facilities that appear busy on paper, but in reality, are nothing more than an empty office space collecting millions of taxpayer dollars.
“The answer, of course, is fraud. And the alarm bells are ringing loud and clear. Open border states led by Democrats like Minnesota, New York, and California are the epicenters of fraud in this country.
“In Los Angeles County alone, 700 of the 1,800 hospice companies located there have displayed at least one red flag that signals they may be conducting fraudulent practices. LA county had a fifteen hundred percent rise in the number of hospice facilities from 2010-2022.
“One building in the county is allegedly the home of 89 different hospices. At one of these scam hospice providers, a social worker wrote about a family’s grief after a patient had died – and yet that patient didn’t exist and there was no evidence they had passed away.
“Why has this occurred? Because California turned off a fraud prevention tool and opened the door for millions to be stolen. But it’s not just in California – health care and social services fraud is a nationwide problem.
“In Minnesota, federal investigators estimate that more than half of roughly $18 billion spent across several public programs have been lost to fraud, either through sham daycare centers linked to the Somali community, pandemic food aid fraud, and government-funded housing services and autism therapy where providers billed for services that were never delivered.
“In Mayor Zohran Mamdani’s New York, fraudulent home health aides are the number one new job in the state by a mile. Millions of taxpayer dollars are being spent on fake adult day care centers, increasing 100 percent just this year.
“Look at the fraud convictions handed down just last week. A pharmacist in New Jersey was sentenced to prison for bilking Medicare $2.5 million for medication he never used and spent some of the stolen taxpayer funds on luxury vehicles. A Michigan surgeon was sentenced to prison for stealing $7 million in Medicare funds from mental health services that were never provided.
“In Miami, foreign nationals from Cuba are fraudulently billing Medicare millions of dollars for durable medical equipment that was never delivered to beneficiaries using their stolen information. And sadly that’s just one instance of the 24 percent of the DME dollars that is improperly paid, including fraud.
“For many Americans, including one of our witnesses today, health care fraud has serious health consequences. Victims with legitimate health care claims seek treatment only to find out that they are unable to use their benefits because every single dollar was already stolen. Leaving Medicare fraud unaddressed risks the health and safety of many more seniors.
“Every single year, Medicare loses $60 billion to fraud, waste, and abuse. That’s $858 per beneficiary that could be helping to shore up the program’s finances or improve benefits. That is staggering.
“Democrat governors and states have let these and other fraud schemes fester and even encouraged them for years. When the truth about the systemic fraud came out, they questioned why it was their states that were under investigation.
“The real question is why Democrat governors like Gavin Newsom and Tim Walz allowed Medicare beneficiaries to become easy targets for fraudsters for so long.
“The Trump Administration on the other hand has made fighting fraud a top priority. Taxpayer money is being recovered, fraudsters are being stopped, and criminals are going to jail. President Trump’s 2025 National Health Care Fraud Takedown saved taxpayers nearly $15 billion and charged more than 300 bad actors with federal crimes.
“To date, Dr. Oz and CMS have shut down 450 hospices with none of those companies asking why their payments stopped arriving. Why? Because they were all fake.
“We are holding this hearing because the American people are demanding answers about the theft of their tax dollars and their Medicare benefits.
“To the fraudsters, your time operating in the dark is over. You will be held responsible, and we will restore the promise of Medicare and what rightfully belongs to the American taxpayer.”