Feds cut funding for Hawaii Medicaid fraud unit

By Andrew Rice
The Center Square

Federal officials decertified Hawaii’s Medicaid Fraud Control Unit on Thursday, citing concerns over a lack of accountability in the program.

Every state that administers Medicaid is required to manage a fraud control unit in order for funds to be properly dispersed. The attorney general in each state must maintain the control unit.

Andrew Ferguson, co-chair of the White House Fraud Task Force, said Hawaii’s Medicaid Fraud Control Unit has not performed according to the Trump administration’s expectations.

He said Hawaii has the lowest performing fraud control unit in the country, a problem that has dated back to 2014. Between 2022 and 2025, Hawaii obtained zero criminal indictments for Medicaid fraud or patient abuse and neglect.

Ferguson said, between 2021 and 2025, enrollments in Medicaid in Hawaii have increased by 40%, while funding increased by 27%. As the Trump administration has pursued fraud, federal officials have cited the COVID-19 pandemic as a period of increased fraudulent activity.

“For more than a decade, Hawaii’s Medicaid Fraud control unit has received millions and millions of dollars to fight fraud and has consistently been one of the lowest performing fraud units in the country,” Ferguson said.

March Bell, inspector general for the U.S. Department of Health and Human Services, wrote a letter to Hawaii Attorney General Anne Lopez, a Democrat, informing her of the decertification. He said the fraud control unit in Hawaii has recieved $3 million annually.

Bell said Hawaii’s lack of arrests and convictions attributed to the decision to pull funding from the program. Without funding for the fraud control unit, Medicaid in Hawaii could be significantly impacted.

“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 at a press conference on Thursday.

In May, the Trump administration issued notice letters to attorneys general in all 50 states, calling for greater cooperation to prosecute fraud in the federal healthcare program.

Ferguson praised the work of Ohio Attorney General David Yost in cooperating with federal fraud enforcement. Prosecutors announced charges against 14 individuals for fraud schemes in Ohio totaling as much as $50 million on Thursday. Recent reports unveiled more than $1.2 billion in potential fraud from Medicaid programs in Ohio alone.

“Avoid becoming like Hawaii, that has zero convictions and zero indictments to show for millions and millions of taxpayer dollars to fight fraud,” Ferguson said.