Exclusive: HHS watchdog finds $19B in waste, fraud and savings
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Megan Robinson/Axios
The government's health care watchdog identified more than $19 billion in wasteful or fraudulent federal payments and possible cost savings during a span that included the first nine months of President Trump's second term, a report provided exclusively to Axios shows.
Why it matters: The Trump administration often cites rampant waste, fraud and abuse as justification for deep program cuts.
- The semiannual report from the Department of Health and Human Services' inspector general backs up that point, identifying questionable spending like a more than sixfold year-over-year increase in Medicare payments for high-tech bandages.
Where it stands: The savings identified in fiscal 2025 dwarf the $7 billion identified through investigative and audit work in 2024.
- But much of the final figure for each semiannual reporting period depends on when certain civil settlements or criminal judgements are finalized, the IG's office told Axios.
Zoom in: OIG this year identified a 640% increase in Medicare payment for high-tech skin substitutes. Medicare administrators in the fall announced a new cap on what the program will pay for the bioengineered grafts — a change that's expected to save more than $9 billion.
- The office will continue looking into skin substitutes next year, Ann Maxwell, deputy inspector general for evaluation and inspections, told Axios.
- "We want to make sure that the fix sticks and that we are protecting Medicare and beneficiaries from this," she said.
What's next: OIG next year will also begin reviewing how well states are complying with new requirements that Medicaid enrollees are U.S. citizens or have a satisfactory immigration status, Maxwell said.
What we're watching: The Senate last month confirmed Thomas March Bell as the next HHS inspector general, succeeding Christi Grimm, who was ousted with a group of other IGs weeks after Trump took office.
- Bell is openly supportive of Trump, and critics have questioned whether he'll lead the organization independently.
- Bell wrote in an introduction to the semiannual report that he'll leverage the office to make sure HHS delivers high-quality services that are "aligned with congressional intent and operate free from fraud, waste, and abuse."
