HR-10636-119
Referred to the House Committee on Energy and Commerce.
Sponsored by Michael Rulli (R-OH)
What it does
This bill would add a new condition to every state's Medicaid plan: each state would have to complete a fraud risk assessment within one year of enactment and annually afterward. States would have to adopt a corrective action plan with measurable outcomes and deadlines within 90 days of each assessment, and report results to the Health and Human Services Secretary each year. The Secretary would have to issue standardized assessment guidelines by January 1, 2027, and send Congress an annual report on national trends and recommendations.
Who benefits
Federal and state taxpayers, if the assessments reduce improper payments. Federal oversight officials and Congress, who would get standardized, comparable state data. State program integrity and Medicaid fraud control units, which may gain a structured basis for requesting resources. Medicaid enrollees and compliant providers, who may benefit if program funds are better protected over time.
Who is hurt
State Medicaid agencies, which would bear new staffing, data, and reporting costs, with no federal funding provided in the bill. Managed care organizations and providers, who may face more scrutiny and data requests. Enrollees, who could face added eligibility verification hurdles if corrective plans tighten enrollment and redetermination processes, which may cause some eligible people to lose coverage. States that fail to comply could risk federal Medicaid funding, since compliance becomes a plan requirement.
Supporters argue
Supporters argue that Medicaid has a high improper payment rate, which the Centers for Medicare & Medicaid Services reports at several percent of spending (tens of billions of dollars annually), and that states lack uniform, forward-looking fraud assessment. They contend that a standardized annual assessment with deadlines for corrective action, building on existing data systems, is a low-cost way to find and fix vulnerabilities. They add that it follows risk-management practices recommended by the Government Accountability Office.
Opponents argue
Opponents argue that much of the measured improper payment rate reflects paperwork and documentation errors rather than fraud, so a fraud-focused mandate may misdirect state resources. They contend the bill imposes an unfunded annual obligation on state agencies already strained by staffing limits, and that corrective plans could lead to stricter eligibility checks that cause eligible people to lose coverage. They add that existing tools such as PERM and state fraud control units already address these risks.
Constitutional context
Congress sets conditions on federal Medicaid funds under the Spending Clause (Art. I, §8, cl. 1). NFIB v. Sebelius (2012) held that Congress may not use funding conditions so severe that they coerce states, but this is an administrative requirement added to the state plan, and it is unlikely to raise that concern.
Checks and balances
The bill would expand HHS authority to set guidelines and receive state reports, and add oversight for Congress through annual reports; states retain control over implementation, and courts could review HHS guidelines and any funding enforcement actions.
Historical precedent
Congress has previously added Medicaid program integrity requirements, such as the Improper Payments Information Act and the Affordable Care Act's provider screening and enrollment rules.