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Ways and Means-Approved Policies Fight Fraud In Critical Safety Net Programs

May 22, 2026

New anti-fraud guardrails prevent theft of taxpayer-funded benefits in Medicare, TANF, and unemployment insurance. 

WASHINGTON, D.C. – Ways and Means Republicans advanced anti-fraud legislation after months of hearings that revealed the extent of fraud and mismanagement in vital programs like Medicare, Temporary Assistance for Needy Families (TANF), and unemployment insurance. Medicare fraud and mismanagement alone totals $60 billion annually, costing each Medicare beneficiary nearly $1,000 per year. Hospice, home health care, and durable medical equipment (DME) were identified as rife with unchecked fraud perpetuated by sophisticated criminal rings, often run by foreign nationals. States have been found to mismanage and abuse federal support for truly needy Americans, in some cases treating federal resources like slush funds to fill state budget gaps. At the same time, fraudulent COVID-era unemployment benefits still sit frozen in banks – six years after the pandemic – that require state and federal action to recover. 

Legislation approved by the Ways and Means Committee will put into place tough new prevention policies to address systemic fraud in the nation’s social safety net programs. 

  • New hospices or hospices with new owners will be required to complete more in-person inspections to verify their legitimacy and fines for failing to submit quality data, a known red flag for fraud, are tripled.
  • DME suppliers will be required to quickly submit reimbursements to Medicare electronically to better detect fraud. 
  • State TANF spending will receive greater federal scrutiny and have additional guardrails on how the money may be used to ensure federal funding helps the truly needy.
  • States will be required to coordinate with financial institutions to recover the nearly $1 billion in fraudulent COVID-era benefits frozen in banks. 
  • The statute of limitations for prosecuting pandemic fraud will be doubled from five to 10 years to provide more time to prosecute fraudsters.

Ways and Means Committee Chairman Jason Smith (MO-08) issued the following statement following Committee approval of these fraud prevention measures: 

“Fraud disrespects American taxpayers while stealing benefits from deserving Americans like seniors, needy families, and the unemployed. Americans are rightly shocked by the blatant fraud happening right out in the open in states like California and Minnesota and elsewhere around the country. Ways and Means Republicans responded to those concerns and approved legislation that cracks down on hotbeds of fraud and mismanagement: hospice care, home health care, durable medical equipment, and federal welfare funding. Our commonsense bills fight for American taxpayers and ensure assistance is not being taken from those who truly need it most.”  

Background on legislation approved by the Ways and Means Committee

Protecting Seniors and Stopping Fraudsters Act (H.R. 8883)

  • Sham hospices are trapping non-terminal patients in hospice care—at some hospices, as many as 97 percent of patients are discharged alive—preventing them from getting treatments. 
  • 10 percent of all Medicare improper payments result from hospice providers and home health agencies (HHA). 
  • There is an estimated $3.5 billion in hospice/HHA fraud in Los Angeles (LA) County alone and $60 billion is lost every year in Medicare. 
  • Vice President Vance’s Task Force to Eliminate Fraud is crushing fraud through major law enforcement actions, especially targeted at transnational criminal gangs.
    • In May 2026, CMS announced a 6-month nationwide moratoria on new hospices and HHAs.
  • This bill cracks down on hospice and home health fraud by providing closer scrutiny of providers and adding better safeguards for beneficiaries: 
    • Protects patients by requiring Medicare to send seniors notification upon hospice enrollment and provide clear directions for quick disenrollment. 
    • Requires annual inspection of hospices and HHA that are newly enrolled or changed owners and requires revalidation of hospices at risk of fraud. 
    • Triples penalties for hospices and HHAs that fail to submit quality data – a fraud red flag. 
    • Holds accrediting organizations (AO) accountable for inspections. 

Read a fact sheet on the bill here. 

The bill passed the Committee 27-16.  

DME Scammer Prevention Act of 2026 (H.R. 8871)

  • Durable medical equipment (DME) fraud using stolen provider or beneficiary information is rampant in Medicare.
    • 24 percent of Medicare DME payments are improper. 
    • Foreign nationals attempted to bill Medicare over $4 billion for fraudulent urinary catheter claims. 
    • $59 million in fraudulently billed orthotic braces from one fraud scheme involving kickbacks to providers. 
  • Medicare’s outdated, pay-and-chase billing systems make detecting DME fraud difficult. 
    • Over 40,500 paper claims are submitted each year, creating barriers for billing claims to be seamlessly screened by fraud detection technology.
    • DME suppliers currently have a full year to submit claims. 
  • This bill combats DME fraud by enabling better use of technology already in place by requiring DME suppliers to submit electronic billing claims and submit claims within 90 days of the physician order for high-risk items.
  • The policy complements the Trump Administration’s swift actions to crack down on bad actors, like a 6-month nationwide moratorium on Medicare enrollment of new DME suppliers. 

Read a fact sheet on the bill here. 

The bill passed the Committee 25-19.

Recover COVID Unemployment Fraud in Banks Act (H.R. 8873)

  • Department of Labor Inspector General (DOL-OIG) recently found nearly $1 billion in unspent COVID-19 unemployment insurance (UI) funds frozen and held by financial institutions across the country due to fraud. 
  • Without Congressional action, hundreds of millions in taxpayer dollars may go unrecovered. 
  • The statute of limitations for prosecuting pandemic UI fraud began to expire in March of 2025.
  • The bill establishes a federal task force, led by a National Recovery Coordinator, to coordinate with applicable state agencies to identify federal pandemic UI payments issued on prepaid debit cards held by financial institutions or transferred to state agencies responsible for unclaimed property and coordinate return to the appropriate state agency. 
  • Extends the statute of limitations for criminal prosecution and civil enforcement actions in pandemic unemployment programs from 5 to 10 years 

Read a fact sheet on the bill here. 

The bill passed the Committee 41-0. 

Preventing Waste, Fraud, and Abuse in TANF Act (H.R. 8872)

  • A lack of safeguards has made the Temporary Assistance to Needy Families (TANF) easy to abuse. For example, TANF is one of the few federal programs not required to measure improper payments. 
  • In 2025, GAO released a series of five reports that found multiple areas in need of improvement in TANF and confirmed that TANF non-assistance, which constitutes 78 percent of total state spending, lacks basic financial guardrails creating an environment ripe for waste, fraud, and abuse. 
  • The bill requires the Department of Health and Human Services (HHS) to measure and report an annual improper payment rate for TANF and develop a plan to eliminate improper payments. 
  • Establishes a federal income threshold of 200 percent of the federal poverty line to ensure TANF funds are targeted to support families in need. 
  • Establishes a 3-year period for states to spend TANF funds and limits funds used for a “rainy day fund” to no more than 15 percent of a state’s annual grant award.
  • Requires federal TANF funds to supplement, not supplant, state and local spending. 

Read a fact sheet on the bill here. 

The bill passed the Committee 23-19.