By Ahmed Aboulenein
WASHINGTON, July 13 (Reuters) - The federal watchdog for the U.S. health department generated $5.56 billion in expected recoveries and projected savings over six months and barred 1,212 individuals and companies from federal programs, it said on Monday, even as its overall enforcement activity fell to the lowest level in two years.
The decline complicates the Trump administration's portrayal of an unprecedented crackdown on healthcare fraud.
The Department of Health and Human Services
Office of Inspector General, in a semiannual report to Congress covering October through March, said it returned $12.70 for every dollar it spent.
The headline figure was anchored by a handful of large cases, including a 15-year prison sentence for a telemedicine software executive behind a $1 billion scheme and $674 million in settlements with Kaiser Permanente affiliates and CVS Health's Aetna over inflated Medicare Advantage billing.
ENFORCEMENT ACTIONS DROP
But the dollars mask a shrinking caseload. Combined criminal and civil actions fell to 604, down from 833 in the prior period and the lowest in at least two years.
The OIG said it had excluded 1,212 individuals or entities from the Medicare program as the result of its investigations, continuing a steady two-year slide from 1,795, and criminal referrals dropped to 1,168 from 1,451. The report showed no surge in enforcement relative to the comparable period under the Biden administration; casework was essentially flat, then fell.
SCORING METHODOLOGY SHIFTS
The OIG's headline figure is complicated by a change in how the office keeps score.
The volatile "total monetary impact" measure, which folds in projected savings alongside money actually ordered repaid, was introduced in early 2025, when Trump took office, and has swung from $16.61 billion to $2.43 billion to the current $5.56 billion. The report cautions in a glossary in its final pages that the figures are ordered or agreed to be repaid, not actual collections.
The report lands as Vice President JD Vance, HHS Secretary Robert F. Kennedy Jr. and Medicare chief Mehmet Oz promote what the White House has called an "unrelenting" war on fraud. The OIG says it now coordinates with a new Vance-led White House fraud task force.
Oz has said the government identified roughly $2 billion improperly spent on people in the country illegally, a figure absent from the report.
The report's geographic findings cut across party lines; unallowable payments for deceased enrollees spanned 35 states plus Puerto Rico and Washington, D.C.
AUTISM SERVICES SCRUTINIZED
Autism services have become a flashpoint. Vance and Oz have repeatedly cited autism-related Medicaid spending as evidence of rampant fraud, but OIG's audits describe something narrower.
Across four states: Indiana, Wisconsin, Maine, and Colorado, the OIG found hundreds of millions in improper and potentially improper payments for applied behavior analysis therapy.
In every case, the cause was administrative: missing documentation, unsigned assessments, cloned session notes, uncredentialed staff and weak state oversight.
None of the audits alleged a criminal scheme, though they do not foreclose the possibility of criminal conduct that other agencies might pursue.
The report is the first full accounting signed by Inspector General T. March Bell, a longtime Republican lawyer confirmed by the Senate in December who previously led a House investigation of Planned Parenthood and served as chief of staff in the HHS Office for Civil Rights under the first Trump administration.
(Reporting by Ahmed Aboulenein; Editing by Kim Coghill)