Feds take aim at Hawaii’s Medicaid waste, cutting millions in fraud funds
By Kristen Consillio
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HONOLULU (KITV) — The U.S. Department of Health and Human Services took bold action today taking away $3 million a year to fight fraud and decertifying Hawaii for what it calls a failure to stop Medicaid waste in the islands.
The Trump administration’s war on Medicaid fraud is taking aim at Hawaii — the feds claiming the state has failed to get a single conviction despite receiving millions in federal taxpayer dollars to fight waste and abuse.
After the pandemic, the feds said Hawaii’s Medicaid funding rose almost 30%, while enrollment went up 40%.
“And they did not produce a single conviction or obtain a single indictment of a fraudster from 2021 to 2025,” said Andrew Ferguson, chairman of the Federal Trade Commission.
Hawaii has about 400,000 residents on Medicaid — almost 30% of the state’s population.
“The reason this is important is because one of the requirements for getting Medicaid money for your state is to have an effective Medicaid fraud control unit and if you don’t have one, it can jeopardize the state’s access to Medicaid money generally,” Ferguson said.
The state’s $2.3 billion Medicaid program gets about $1.4 billion a year from the federal government.
“For more than a decade, Hawaii’s Medicaid fraud control unit has received millions and millions of dollars to fight fraud and is consistently been one of the lowest performing fraud units in the country,” Ferguson added.
In response, Gov. Josh Green has created an independent Medicaid Fraud Strike Force within the state Department of Human Services (DHS) to improve oversight and accountability in Medicaid waste and abuse.
“Hawaii does a better job with Medicaid than probably any other state, so I refuse to get into a conflict with the president’s team,” Green said. “I just won’t do it. I’m going to keep making sure that we do our very best to not waste. We’ll do our very best if someone’s breaking the rules, but I won’t take the political bait and get into a fight.”
Since 2021, state Attorney General Anne Lopez said the Medicaid fraud unit has recovered more than $14 million and investigated provider fraud and prosecuted cases involving the abuse and neglect of vulnerable residents.
In a statement, Lopez said, “Medicaid fraud enforcement is not measured solely by convictions. It includes preventing fraud, recovering taxpayer dollars, protecting beneficiaries, and pursuing appropriate civil and criminal remedies… We strongly disagree with any suggestion that Hawaii has failed to take Medicaid fraud seriously.”
Lopez plans to ask for reconsideration of the federal government’s decision. In the meantime, the state is reassuring Medicaid recipients that health insurance benefits will not be impacted.
“Of course, we can’t ever ensure that there won’t be future cuts,” said DHS director Joseph Campos. “Right now, we know that the current federal cuts are to the Medicaid fraud control unit only and we do not anticipate that there will be any adverse effect on the Medicaid insurance population.”
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