https://medcitynews.com/2025/10/dr-oz-says-medicaid-cms-healthcare/

CMS Administrator Dr. Mehmet Oz said that Medicaid’s rapid spending growth is unsustainable and criticized state financing tactics that let providers and governments “game” the system for extra federal funds. He said CMS is shifting its fraud strategy to follow the flow of money rather than just individual offenders in an effort to ensure health dollars are used for legitimate care.

Medicaid is now the fastest-growing expense for most states, oftentimes crowding out funding for education and social services.

CMS Administrator Dr. Mehmet Oz drew attention to this during a talk this week at Sanford Health’s Annual Summit on the Future of Rural Health Care in Sioux Falls, South Dakota.

He noted that federal Medicaid spending has increased by 50% over the past five years, with much of this being tied to pandemic-era policies that weren’t rolled back. From Dr. Oz’s perspective, this presents opportunities for states and providers to “game” the system.

“Certainly the legalized money laundering from state-directed payments and provider taxes, no matter what you might think about them, don’t align with the federal government and with state governments. They do quite the opposite. It was a grab bag, and states could take as much as they could from the federal government. Oftentimes, states were different in their capabilities, so some states took a lot, and others didn’t,” he remarked.

Essentially, Dr. Oz is criticizing Medicaid’s financing mechanism that allows states to draw down extra federal funds. Many states levy taxes on hospitals, nursing homes and other healthcare providers — and then use that revenue, along with state-directed payments, to trigger additional Medicaid matching funds from the federal government, he said.

During his address, Dr. Oz also said that fraud in the Medicaid and Medicare programs is abundant. To combat this fraud, he said CMS is now focusing on tracking the flow of money rather than pursuing individual bad actors.

“We’re actually chasing the money now, not the person. And we have joined initiatives with the Treasury and DOJ to address some of these issues that you’ll be hearing more about. We have already stopped about $4 billion from leaving the building by using these kinds of tactics,” he stated.

Overall, Dr. Oz said that CMS is committed to working with other departments to recover misappropriated funds and shut down schemes that exploit systemic loopholes.

He believes this strategy allows the government to act more quickly and effectively, ensuring that federal health dollars reach the patients and programs they were intended to serve.

“We have to go after these programs, come up with clever ideas to help the good people who are trying to do the right thing, and separate the wheat from the chaff — from folks who are defrauding the country, and by doing that, aggressively change the incentives around some of these businesses,” Dr. Oz. declared.

In his eyes, this tightening of oversight and alignment of incentives within CMS will redirect billions of dollars toward more legitimate care delivery efforts.