On May 1, 2026, Nebraska became the first state to enforce new Medicaid work requirements. The 2025 reconciliation law requires states to condition Medicaid eligibility for adults in the ACA Medicaid expansion group and enrollees in certain waiver programs (such as in Georgia and Wisconsin) on meeting work requirements or exclusion criteria starting January 1, 2027; however, states have the option to implement requirements sooner (as is the case for Nebraska). KFF analysis shows most Medicaid adults under age 65 are working already (without a requirement) or face barriers to work. This brief describes the verification process for Medicaid work requirements in Nebraska and examines early data from Nebraska’s September Medicaid Advisory Committee (MAC) meeting on outcomes for individuals subject to work requirements, including for those newly applying for Medicaid as well as those renewing Medicaid coverage through August 2026. Data show that among those subject to the new work requirements:

• 46% of new applicants and 34% of individuals renewing coverage met qualifying activities (e.g., working at least 80 hours a month, having a monthly household income of at least $580, attending school).
• 39% of new applicants and 57% of individuals renewing coverage qualified for an exclusion from work requirements (e.g., due to being a parent of a child under age 14, being medically frail).
• 14% of new applicants and 7% of individuals renewing coverage had their applications denied or lost coverage due to not meeting work requirements.
• Only a small number of people (2% of new applicants and 2% of individuals renewing coverage) had a short-term hardship exception.

What is the verification process for Medicaid work requirements in Nebraska?

Nebraska is using a combination of available data and self-declaration forms to verify whether individuals meet work requirements or exclusion criteria; the state has also adopted temporary hardship exceptions. In cases where the state can automatically verify that individuals meet work requirements, it sends an approval notice. For individuals where the state does not have enough information, the state sends a notice describing the additional information that is required and a declaration form that must be returned within 30 days. Individuals can use the declaration form to attest that they met qualifying activities or that they meet the criteria for an exclusion from the requirements. The interim rule clarified that while states are allowed to accept self-declaration through 2027, starting in January 2028, except for medical frailty, states must request documentation from individuals when the state does not have data on file. Nebraska has also chosen to adopt optional short-term hardship exceptions for enrollees (or applicants) experiencing certain extenuating circumstances, including residing in counties with high unemployment rates or experiencing natural disasters, individuals admitted to a hospital or nursing facility, or those who must travel outside of their community for an extended period to obtain medical care for themselves or a dependent.

What are the initial data on Nebraska Medicaid application and renewal outcomes?

Among those who were newly applying for Medicaid and subject to the new work requirements in Nebraska, 86% of applicants met the work requirements or qualified for an exclusion or short-term hardship exception, while 14% of individuals had their application denied (Figure 1). A total of 9,614 applications were processed between May to August. Of these, some were submitted prior to May and therefore not subject to work requirements, and 4,434 were denied for reasons other than work requirements (e.g., income exceeding Medicaid eligibility thresholds). Among the remaining 4,089 applications subject to work requirements:

• Nearly half of all individuals (46%) met the qualifying activities. Among those who met the requirement, the vast majority of people (92%) worked 80 or more hours in the month prior to their application or had a household income of $580. A much smaller share (8%) were enrolled in an education program or work program, volunteered, or met requirements by combining hours across multiple types of qualifying activities.
• About 4 in 10 individuals (39%) qualified for an exclusion. Of these applicants, one-third were parents or caregivers of a child under the age of 14 or a disabled individual (33%); one quarter were medically frail, and 12% were an American Indian or Alaska Native. The remaining 30% qualified for other exclusions. Because the state is relying on self-attestation, future documentation requirements may lead to a lower share of individuals who qualify for an exclusion.
• Only a small number of individuals had a short-term hardship exception. Only 92 individuals met the criteria for short-term hardship exceptions, with the majority of these being individuals who required temporary use of medical services or living in counties that were exempted due to high unemployment.
• 14% of individuals had their application denied. Most of the 557 denied applications were due to non-response to requests for additional information (84%); only 16% of applicants with denied applications were affirmatively found to be noncompliant.

Among those who were renewing their Medicaid coverage and subject to the new work requirements, 93% met work requirements or qualified for an exclusion or short-term hardship exception and had their coverage renewed, while 7% of enrollees lost coverage (Figure 2). A total of 7,280 renewals subject to work requirements were processed between July and mid-August. Other expansion enrollees determined ineligible and disenrolled at renewal for reasons not related to work requirements (e.g., moving out of state or exceeding income eligibility) are not shown in the figure below.

• Over half (57%) of individuals renewing their coverage qualified for an exclusion from the requirements. Medically frail individuals (39%) and parent/caregivers (31%) made up the majority of those who met an exclusion. States are more likely to have medical claims history for individuals renewing coverage than new applicants, meaning Nebraska may have been able to automatically verify medical frailty for a higher share of enrollees compared to applicants. States are also required to verify exclusions status first, and it is likely that some enrollees who were excluded, especially parents, are also working.
• About a third of individuals (34%) met the qualifying activities requirement. Nearly all (97%) of individuals who met the qualifying activities were either working 80 hours a month or had a household income of $580. The remaining 3% met the requirements by attending school, volunteering, or engaging in a combination of activities.
• A small share of individuals qualified for a short-term hardship exception. Of the 127 people who had a short-term hardship exception, 109 lived in counties experiencing natural disasters and 15 lived in a high unemployment county.
• 7% of people lost coverage due to not meeting the work requirements. Of the 533 individuals who lost coverage, 92% did not respond to verification compliance requests. The remaining 8% were affirmatively found to be noncompliant.

What can additional data show?

While these data provide early insights into how coverage may be affected for enrollees subject to the new work requirements, additional data may provide a more comprehensive picture. More granular data on who is losing coverage could shed light on particular barriers certain individuals may be facing in trying to prove they met qualifying activities (e.g., gig workers or those with multiple part-time positions) and may help the state identify additional data to include as part of the verification process. In addition, it remains unclear if individuals who were denied coverage or disenrolled because they did not respond to notices of non-compliance were ineligible for coverage, unaware of the fact they needed to provide additional information, or experienced difficulty providing documentation of their exclusion or work status. Additional data, including whether these individuals reapply for coverage, could provide insight.

Required changes to the state’s medical frailty verification process specifically and limitations on the use of self-attestation starting in 2028 will likely affect disenrollment rates over time. CMS recently notified the state that it will need to make changes to its medical frailty verification process. If the state is required to tighten the verification process, fewer individuals may qualify for the exclusion in the future. More broadly, while the state’s reliance on self-attestation in 2027 will likely mitigate some coverage losses that would have occurred had documentation been required in the first year of implementation, future documentation requirements may impose a barrier that will lead to a decrease in the number of people who are able to verify they meet work requirements or qualify for an exclusion. As the state makes changes to its processes, monitoring the interactive effect of application denials and disenrollments on Medicaid enrollment in the state as well as whether the new rules lead to fewer individuals applying for Medicaid will be important.

For many years, KFF polling has found that the high cost of health care is a burden on U.S. families, and that health care costs factor into decisions about insurance coverage and care seeking. These costs also rank as the top financial worry for adults and their families. This data note summarizes recent KFF polling on the public’s experiences with health care costs. Main takeaways include:

• Health care costs are at the top of the list of people’s financial worries, with about a quarter (27%) saying they are “very” worried about affording health care costs for themselves and their families. This is followed by about one in five adults who are “very” worried about affording other household expenses, such as gasoline and transportation costs (22%), their rent or mortgage (21%), food and groceries (20%), or monthly utilities (19%).
• The cost of health care can lead some to put off needed care. About three in ten (28%) adults say in the past 12 months they have skipped or postponed getting health care they needed because of the cost. Uninsured adults under age 65 (62%), young adults under age 30 (40%), Hispanic adults (34%), adults with lower incomes (32%), and women (31%) are among the most likely to report that they put off needed care in the past year because of the cost. Putting off needed health care can have health repercussions; about one in seven (15%) adults overall say their health got worse because they skipped or delayed needed care for any reason, including cost, rising to 27% among those with multiple health conditions.
• Just under half of adults in the U.S. say it is difficult to afford health care costs and substantial shares struggle to pay medical bills, often with financial consequences. About one in five (22%) adults overall say they had problems paying or were unable to pay medical bills in the past 12 months, including one in seven (14%) who say they cut back on basic household expenses, like clothes or food in order to pay health care costs. These experiences are especially common among younger adults, women, those with lower incomes, and the uninsured. In addition, LGBTQ+ adults and those with multiple health conditions face outsized problems paying medical bills.
• The cost of prescription drugs prevents some people from filling prescriptions. About four in ten (43%) U.S. adults say they have not taken their medication as prescribed in the past year due to costs. This includes three in ten who say they have taken an over-the-counter drug instead of getting a prescription filled (31%), a quarter (27%) who have not filled a prescription, and one in five (19%) who have cut pills in half or skipped doses of medicine because of the cost. Larger shares of lower-income, uninsured, women, Black, and Hispanic adults report taking these measures.
• Health care debt is a burden for a large share of Americans. In 2022, about four in ten adults (41%) reported having debt due to medical or dental bills including debts owed to credit cards, collections agencies, family and friends, banks, and other lenders to pay for their health care costs, with disproportionate shares of Black and Hispanic adults, women, parents, those with low incomes, and uninsured adults saying they have health care debt.
• Those who are covered by health insurance are not immune to the burden of health care costs. Large shares of adults with employer-sponsored insurance (ESI) and those with Marketplace coverage rate their insurance as “fair” or “poor” when it comes to their monthly premium and to out-of-pocket costs to see a doctor. In addition, three in ten insured adults ages 18-64 say report skipping or postponing care because of the cost and about a quarter say they had problems paying medical bills in the past year.

Worries and Difficulty Affording Medical Costs

For most of 2026, health care costs have remained at or near the top of the list of people’s financial worries, with about six in ten saying they are “very” (27%) or “somewhat worried” (35%) about affording health care costs for themselves and their families, including the cost of health insurance and out-of-pocket costs for things like office visits and prescription drugs. About one in five adults say they are “very worried” about affording other household expenses, such as gasoline and transportation costs (22%), their rent or mortgage (21%), food and groceries (20%), or monthly utilities (19%).

Notably, just under nine in ten (87%) uninsured adults under age 65 say they are very or somewhat worried about affording the cost of health care, though a large share of insured adults under age 65 are also worried (64%). Health care costs are a top household worry across insurance types and across partisans. (Source: KFF Health Tracking Poll: July 2026)

Echoing these worries, many U.S. adults find health care costs difficult to afford. While lower income and uninsured adults are the most likely to report this, those with health insurance and those with higher incomes are not immune to the high cost of medical care. Just under half of U.S. adults say that it is very or somewhat difficult for them to afford their health care costs (44%). Uninsured adults under age 65 are much more likely to say affording health care costs is difficult (82%) compared to those with health insurance coverage (42%). Additionally, a slight majority of Hispanic adults (55%) and half of Black adults (49%) report difficulty affording health care costs compared to about four in ten White adults (39%). Adults in households with annual incomes under $40,000 are more likely than adults in households with higher incomes to say it is difficult to afford their health care costs. (Source: KFF Health Tracking Poll: May 2025)

The cost of care can also lead some adults to skip or delay seeking services. Roughly three in ten adults (28%) say that they have skipped or postponed getting needed health care in the past 12 months because of the cost. Women, younger adults, Hispanic adults, and those with lower incomes are more likely than their counterparts to report skipping or postponing care due to cost. In addition, roughly six in ten (62%) uninsured adults say they have skipped or postponed getting the health care they needed due to cost. Having health insurance, however, does not offer full protection as three in ten adults ages 18 to 64 with insurance still report not getting health care they needed due to cost.

Skipping care for any reason, including cost, can have notable health impacts. Roughly one in seven (15%) adults report that their health got worse because they skipped or delayed getting care for any reason. Among adults under age 65, those who are uninsured are significantly more likely than those with health coverage to say that their health worsened due to skipped or postponed care (27% vs. 17%). Four times as many adults under age 30 (24%) say their health got worse after skipping or postponing care as adults ages 65 and older (6%), most of whom have Medicare coverage. (Source: KFF Survey of Health Access and Caregiving)

Problems Paying Medical Bills

About one in five (22%) adults overall say they had problems paying or were unable to pay medical bills in the past 12 months, including bills for doctors, tests or labs, or medication. Larger shares of younger adults, women, Hispanic adults, Black adults, those with lower incomes, and adults under age 65 without health insurance report problems paying medical bills than their counterparts.

Problems paying bills can lead to important financial consequences, with one in seven (14%) adults saying they have had to cut back on household expenses like food, clothing, or other basic household items in order to pay for health care costs. This experience is more common among adults with lower incomes (20% of those with an income of less than $40,000 a year) and uninsured adults under age 65 (26%).

Skipping Care and Medical Bill Problems Among LGBTQ+ Adults and Those With Serious Health Conditions

KFF polling has found that some populations are more likely than others to report challenges with health care affordability. One such population is LGBTQ+ adults, who are on average younger and have lower incomes than their non-LGBTQ+ counterparts. More than four in ten (43%) LGBTQ+ adults report skipping or delaying care in the past year due to cost, compared to about a quarter (26%) of non-LGBTQ+ adults, according to the KFF Survey of Health Access and Caregiving. Another three in ten LGBTQ+ adults report that they had problems paying or an inability to pay medical bills in the past year, including two in ten (19%) who report cutting back on basic household expenses to pay for health care costs. Trans adults are especially likely to report these challenges, with over half (56%) of trans adults saying they skipped or delayed care because of the cost. Almost half (45%) of trans adults say their health got worse due to delayed or skipped care for any reason. (For a more detailed analysis, see Examining LGBTQ+ Adults’ Experiences with Health Care Costs and Access)

Those with multiple and complex health conditions also face disproportionate problems with medical bills and worsened health due to skipping care. About one-third (36%) of adults ages 18-64 with three or more health conditions report they did not get the health care they needed in the past year because of the cost and a quarter (27%) say their health got worse because they skipped or delayed care for any reason, including cost. More than a third (36%) of those ages 18-64 with three or more conditions report problems paying medical bills in the past year, while around one in four (24%) say they have cut back on household expenses to pay for health care. (For a more detailed analysis, including the experiences of adults with conditions like cancer, mental health conditions, and diabetes, see: Health Care Access and Affordability for Adults with Multiple or Complex Health Conditions: A Snapshot of Patient Experiences)

Prescription Drug Costs

The high cost of prescription drugs also leads some people to cut back on their medications in various ways. About three in ten adults (31%) say in the past 12 months they have taken an over-the-counter drug instead of getting a prescription filled because of cost concerns, while about a quarter (27%) say they have not filled a prescription and about one in five (19%) say they have cut pills in half or skipped doses of medicine due to cost. Overall, four in ten (43%) adults report taking at least one of these measures in the past year, continuing an upward trend from a third (33%) in 2025 and about three in ten (31%) in July 2023.

Larger shares of adults in households with lower and middle incomes report resorting to these cost-saving prescription medication solutions compared to those with higher incomes. About half of adults in households with annual incomes under $40,000 (52%) or between $40,000 and $90,000 (47%) say they have not taken their medication as prescribed due to the cost in the last year, compared to three in ten adults in households with incomes of $90,000 or more. Uninsured adults under age 65 are more likely than their counterparts to also report not taking their medicine as prescribed due to costs (58% compared to 43% of insured adults under age 65). Additionally, half of women (49%) say they have taken any of these prescription medication measures compared to about a third (36%) of men. Over half (55%) of Black adults say the same, compared to half (47%) of Hispanic adults and four in ten White adults. (Source: KFF Health Tracking Poll: March 2026)

Health Insurance Cost Ratings

Health insurance provides some financial protection, but premiums and out-of-pocket costs can still present a financial burden for many individuals. Overall, most insured adults rate their health insurance as “excellent” or “good” when it comes to the amount they have to pay out-of-pocket for their prescriptions (61%), the amount they have to pay out-of-pocket to see a doctor (53%), and the amount they pay monthly for insurance (54%). However, at least three in ten rate their insurance as “fair” or “poor” on each of these metrics, and affordability ratings vary depending on the type of coverage people have.

Adults who have private insurance through employer-sponsored insurance or Marketplace coverage are more likely than those with Medicare or Medicaid to rate their insurance negatively when it comes to their monthly premium, the amount they have to pay out of pocket to see a doctor, and their prescription co-pays. About one in four adults with Medicare give negative ratings to the amount they have to pay each month for insurance and to their out-of-pocket prescription costs, while about one in five give their insurance a negative rating when it comes to their out-of-pocket costs to see a doctor.

Medicaid enrollees are less likely than those with other coverage types to give their insurance negative ratings on these affordability measures (Medicaid does not charge monthly premiums in most states, and copays for covered services, where applied, are required to be nominal). (Source: KFF Survey of Consumer Experiences with Health Insurance)

Health Care Debt and Long-Term Costs

In June 2022, KFF released an analysis of the KFF Health Care Debt Survey, a companion report to the investigative journalism project on health care debt conducted by KFF Health News and NPR, Diagnosis Debt. This project found that health care debt is a wide-reaching problem in the United States and that 41% of U.S. adults currently have some type of debt due to medical or dental bills from their own or someone else’s care, including about a quarter of adults (24%) who say they have medical or dental bills that are past due or that they are unable to pay, and one in five (21%) who have bills they are paying off over time directly to a provider. One in six (17%) report debt owed to a bank, collection agency, or other lender from loans taken out to pay for medical or dental bills, while similar shares say they have health care debt from bills they put on a credit card and are paying off over time (17%). One in ten report debt owed to a family member or friend from money they borrowed to pay off medical or dental bills.

While four in ten U.S. adults have some type of health care debt, disproportionate shares of lower income adults, the uninsured, Black and Hispanic adults, women, and parents report current debt due to medical or dental bills.

Many U.S. adults may be one unexpected medical bill from falling into debt. About half of U.S. adults say they would not be able to pay an unexpected medical bill that came to $500 out of pocket. This includes one in five (19%) who would not be able to pay it at all, 5% who would borrow the money from a bank, payday lender, friends or family to cover the cost, and one in five (21%) who would incur credit card debt in order to pay the bill. Women, those with lower household incomes, Black and Hispanic adults are more likely than their counterparts to say they would be unable to afford this type of bill. (Source: KFF Health Care Debt Survey: Feb.-Mar. 2022)  

Among older adults, the costs of long-term care and support services are also a concern. Almost six in ten (57%) adults 65 and older say they are at least “somewhat anxious” about affording the cost of a nursing home or assisted living facility if they needed it, and half say they feel anxious about being able to afford support services such as paid nurses or aides. These concerns also loom large among those between the ages of 50 and 64, with more than seven in ten saying they feel anxious about affording residential care (73%) and care from paid nurses or aides (72%) if they were to need these services. See The Affordability of Long-Term Care and Support Services: Findings from a KFF Survey for a deeper dive into concerns about the affordability of nursing homes and support services.

Federal law requires every state to operate a Medicaid Fraud Control Unit (MFCU) that investigates and prosecutes provider fraud and patient abuse and neglect. MFCUs are typically housed within the state Attorney General’s office and are required to operate independently from the state Medicaid agency that runs the Medicaid program. MFCUs are one component in the Medicaid program integrity system, which includes many different state and federal agencies with shared and distinct responsibilities defined by state and federal law. Ensuring Medicaid program integrity (i.e., the appropriate use of federal and state Medicaid funds) involves a range of activities from fraud prevention to enforcement activities—the primary responsibility of MFCUs. While MFCUs are a key part of the program integrity system, it can be difficult to compare MFCU data across states or to put fraud recovery dollars into the context of overall Medicaid spending because recovery data only capture a portion of Medicaid program integrity efforts (e.g., leaving out the value of fraud prevention or stopped payments) and don’t capture fraud that goes undetected.

As the Trump Administration continues to focus on addressing fraud, waste, and abuse in federal programs, including Medicaid, MFCUs are facing increased federal scrutiny. In May 2026, CMS announced the HHS Office of the Inspector General (HHS-OIG) would be initiating a review of every state’s MFCU before its next annual recertification. In June 2026, the HHS-OIG denied recertification and suspended federal funding for Hawaii’s and New York’s Medicaid Fraud Control Units. Within this context, this brief provides an overview of the role of MFCUs, examines caseload and case outcome data, and current issues facing MFCUs.

What are MFCUs and how do they work?

MFCUs are law enforcement entities that investigate and prosecute provider fraud and patient abuse and neglect. MFCUs investigate and prosecute, or refer to prosecution, provider fraud (in all settings) and complaints of patient abuse in certain health care settings, such as nursing homes and hospitals receiving Medicaid funds.¹ MFCUs do not investigate fraud or program abuse committed by beneficiaries (these cases are the responsibility of the state Medicaid agency), although evidence of beneficiary fraud is low.² MFCUs must operate independently from the state Medicaid agency and are often part of the State Attorney General’s office, employing teams of investigators, attorneys, and auditors. The HHS-OIG oversees MFCUs, annually recertifying each MFCU, assessing performance and compliance with federal requirements, and administering federal grant awards (which cover 75% of MFCU operating costs).

MFCUs open investigations after receiving referrals of suspected provider fraud or complaints involving patient abuse or neglect. A MFCU case typically begins with a referral from the state Medicaid agency (including program integrity or auditing offices), managed care organization (MCO), or from a complaint filed by a patient or former employee. The state Medicaid agency or MCO may initially detect fraud through monitoring Medicaid data and using data mining or analytics to identify billing pattern anomalies (e.g., billing spikes, upcoding, double billing, or unusual hours). All state Medicaid agencies have authority to conduct data mining, but some MFCUs have also specifically been granted permission by HHS-OIG to mine Medicaid data directly for evidence of fraud as part of their regular activities. More MFCUs may begin to conduct data mining or analytics as HHS-OIG in August 2026 waived the requirement that MFCUs obtain prior approval for these activities to identify suspected Medicaid fraud. While patient abuse or neglect may fall under the jurisdiction of several different law enforcement agencies, MFCUs may investigate patient abuse or neglect in health care facilities receiving Medicaid funds.³

MFCU cases vary in duration and scope, but investigations generally follow a standard process starting with an investigation and ending with potential financial recoveries (Figure 1).

Investigation. When a case is opened, the investigative team researches the alleged fraud or abuse by analyzing the evidence. Investigations may take months or years before charges are filed against providers.

Criminal Indictments & Civil Cases. Fraud and abuse can violate state and/or federal criminal law, civil law, or both. If a MFCU’s investigation team determines there is sufficient evidence of wrongdoing, the MFCU can bring criminal charges and/or civil lawsuits against the provider.

Criminal Convictions & Civil Judgments. Criminal convictions can result in a criminal record, financial penalties, and/or incarceration. Civil judgments can establish liability and/or impose financial penalties and other court-ordered remedies. Providers who are convicted or liable for criminal fraud or patient abuse/neglect (along with other crimes) legally must be excluded from participating in federally funded health care programs. HHS-OIG or state Medicaid agencies may also decide to exclude providers beyond these minimum standards.

Recoveries. HHS-OIG defines recoveries as the amount of money that defendants are required to pay as a result of a settlement, judgment, or prefiling settlement in criminal and civil cases. Recoveries may not reflect the amounts actually collected from defendants (e.g., if the defendant is a company that dissolved before collections could be obtained). MFCUs work with state Medicaid agencies to return the state and federal share of any recovered Medicaid payments.

Note: Throughout the lifecycle of a case, MFCUs may collaborate with other state and federal program integrity and law enforcement partners. State entities include state inspectors general and state health departments and federal entities include the U.S. Department of Justice (DOJ) (including Federal Bureau of Investigation (FBI)) and the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). Some investigations or cases may be transferred to (or handled by) federal law enforcement agencies.     

What data do MFCUs report?

Annually, MFCUs report investigation, enforcement, and financial recoveries data to HHS-OIG. Each year, HHS-OIG releases a summary report of MFCU activities that provides an annual snapshot of aggregated case outcomes from all MFCUs and certain case outcome trends. In addition to the summary report, HHS-OIG releases individual (state) MFCU case activity and outcomes data.

At the end of FY 2025, there were 15,810 open investigations across all state MFCUs. While MFCUs investigate both provider fraud and patient abuse and neglect, data show most MFCU investigations are related to provider fraud (Figure 2). A subset of investigations leads to criminal indictments or civil cases / complaints. MFCU investigations can take months to years, depending on various factors, including the types of allegations involved, volume of records, and agencies involved.

In FY 2025, MFCUs obtained 1,180 criminal convictions and reached 661 civil settlements and judgements (Figure 3). Most criminal convictions were for provider fraud. HHS-OIG uses information it receives from MFCUs to exclude individuals and entities from participating in federal health programs. In FY 2025, 900 individuals or entities were excluded because of criminal convictions obtained by MFCUs—accounting for nearly one-third (32%) of all OIG exclusions that year (data not shown).

On average, MFCUs recover more than $1 billion each year from fraud investigations. Nationally, MFCUs recovered $1.97 billion in FY 2025. While recoveries include other financial penalties in addition to Medicaid funds recouped from providers due to MFCU investigations (and may not reflect amounts actually collected⁴), the total amount of recoveries is small compared to total Medicaid spending. Recoveries vary each year and can be skewed by factors, including timing of settlements and large multi-year cases. Recoveries typically vary substantially from year to year and have averaged $1.48 billion per year over the period 2016 to 2025. A 5-year rolling average accounts for periodic variation and shows that recoveries decreased during the COVID-19 Public Health Emergency and are returning to pre-COVID levels. Recoveries, after accounting for year-to-year variation, have remained generally steady over time while total Medicaid spending has increased. Recoveries are not a comprehensive measure of enforcement (because they may not include Medicaid-related enforcement actions that occurred outside of MFCU actions) and do not include the possible financial impacts of other program integrity efforts, such as preventing fraud before it occurs. Of the $1.97 billion in recoveries, two-thirds (64%) were due to criminal convictions and one-third (36%) were due to civil judgments or settlements (data not shown). This is proportionate to the share of criminal and civil case resolutions in FY 2025 (Figure 3).

Comparing data across states or considering recovery dollars in the context of overall Medicaid spending can be challenging. Comparing MFCU data across states or years can be difficult due to differences in state law (that impact the handling of cases) and varying duration, scope, or complexity of cases, among other factors. Comparing MFCU recoveries to overall Medicaid spending can also be challenging to interpret as a hypothetical indicator of MFCU performance because these data only capture a portion of Medicaid program integrity efforts and include amounts other than recouped Medicaid payments. States can also make policy decisions that might impact state spending and MFCU recoveries differently. For example, states that spend more on prevention or early detection may see fewer recoveries (if these activities are successful), while states that invest less in fraud prevention may see higher levels of enforcement action and recoveries. There are no estimates of fraud that may have been successfully prevented or fraud that went undetected/unrecovered; however, over time there has been a shift in focus from efforts to recover misspent funds (“pay and chase”) to prevention and early detection. A higher level of MFCU recoveries could indicate more fraud, more aggressive enforcement, or less effective prevention.

What are current issues involving MFCUs?

MFCUs continue to work with state and federal agencies to stop fraud and abuse but also face increased federal scrutiny. On May 13, 2026, HHS Investigator General Bell sent a letter to every state Attorney General communicating a stance of “insistence on rigid MFCU compliance” with requirements and performance standards that will be enforced through “robust review” by the HHS-OIG. MFCUs are recertified annually on a rolling schedule, based on each specific state or territory’s original certification date.⁵ As of September 17, 2026, HHS-OIG has followed release of the May 2026 letter by issuing standard recertifications to 3 states and “conditionally recertifying” 11 state MFCUs, a designation which accompanies a set of corrective actions recommended by HHS-OIG. It does not appear that HHS-OIG regularly issued conditional recertifications prior to 2026.

In June 2026, Hawaii’s and New York’s MFCUs were notified that HHS-OIG was denying their annual recertification in letters citing insufficient case outcomes in both states. HHS announced that it was denying Hawaii’s and New York’s annual MFCU recertifications, discontinuing federal funding for the fraud control units. In each state’s recertification denial letter, HHS cites insufficient case outcomes (particularly low production of criminal indictments and convictions) and recoveries that are disproportionately low relative to the staffing and budget of the state MFCU (New York) or relative to the growth in the state’s Medicaid spending (Hawaii). States that have their MFCU recertification denied can appeal the decision and request that HHS-OIG reconsider; Hawaii indicated they intended to seek reconsideration. Hawaii and New York have responded to their denied MFCU certifications by reiterating their states’ commitment to Medicaid program integrity and highlighting ongoing actions to prevent and detect suspected Medicaid fraud. It is unclear if HHS-OIG may deny the recertification of other state MFCUs, but the discontinuation of federal funding could hamper states' ability to continue ongoing operations or initiate new investigations.

1. MFCUs can also elect to investigate and prosecute patient abuse and neglect in non-institutional settings (e.g., home and community-based settings). ↩︎
2. While states may have their own laws defining responsibilities around investigating beneficiary fraud or program abuse, MFCUs cannot use federal funding to investigate alleged beneficiary fraud unless it is in relation to suspected provider fraud. ↩︎
3. Ibid. ↩︎
4. Recoveries may not reflect the amounts actually collected from defendants (e.g., if the defendant is a company that dissolved before collections could be obtained). MFCUs work with state Medicaid agencies to return the state and federal share of any recovered Medicaid payments. ↩︎
5. Federal requirements and performance standards serve as the basis for MFCU annual recertification by HHS-OIG. When a MFCU applies for annual recertification, the MFCU submits performance and budget data, including staffing, costs, case numbers and outcomes, and other information requested by HHS-OIG. HHS-OIG may conduct an onsite review of the MFCU. ↩︎