HHS–OIG Flags $16.6 B in Healthcare Fraud in the Spring 2025 Semiannual Report to Congress    

by Anna D’Agostino and Nicole Jefferson

The Department of Health & Human Services (“HHS”) Office of Inspector General (“OIG”) is responsible for overseeing the department and promoting and maintaining the efficiency, effectiveness, and integrity of its programs. On June 2, 2025, HHS-OIG released its Spring 2025 Semiannual Report to Congress, summarizing HHS activities for the 6-month period between October 1, 2024, and March 31, 2025. The Spring 2025 Report (the “Report”) identified more than $16.6 billion in healthcare fraud, overpayments, and improper payments, revealing significant vulnerabilities in Medicare Advantage, grants, and provider billing. The report also found $3.5 billion in funds owed to the federal government.

By advocating for greater transparency and oversight of healthcare organizations and pharmaceutical companies, the Report reinforces the importance of False Claims Act enforcement and whistleblower reporting, core strengths of Miller Shah LLP’s healthcare fraud and whistleblower representation practice.

Recent HHS-OIG Efforts: Financial Integrity & Healthcare Fraud Enforcement Actions

HHS-OIG conducted 744 civil and criminal enforcement actions over the Report period, resulting in hundreds of settlements.  These actions addressed management and performance challenges in public health, financial integrity, Medicare and Medicaid, beneficiary safety, and data and technology security. HHS-OIG works closely with the Department of Justice (DOJ) and the Federal Bureau of Investigation (FBI) to carry out these enforcement actions.

These enforcement actions suggest an increase in critical oversight to reduce the abuses and risks of healthcare fraud.  Particular areas of HHS-OIG focus included home health care fraud actions, drug diversion actions, COVID-19 fraud, and Medicare patient abuse and neglect.  For example, the Report summarized a coordinated effort between OIG and law enforcement which resulted in the operator of Arbor Homecare Services LLC, a home health care company, being convicted for a $100 million fraud scheme for billing MassHealth for home health services that were never provided and for paying kickbacks for patients referrals, regardless of medical necessity.

In another instance, OIG barred a Texas pharmacy owner from participating in all federally funded health care programs for 50 years after he was found guilty of four counts of paying and receiving kickbacks and one count of conspiracy to launder monetary instruments. The pharmacy owner worked with others to create and market expensive compounded medications and paid marketers to recruit physicians to prescribe these drugs, which defrauded federal health programs.

Focus on Medicare Advantage and Medicaid Fraud Control Units

The Report reveals that HHS-OIG is currently prioritizing identifying more specific risk areas like Medicare Advantage and Remote Patient Monitoring, updating compliance and regulatory programs and developing Medicare Fraud Strike Force teams. Medicare Advantage accounts for more than half of all Medicare spending, and the program has increasingly been under scrutiny for its propensity for False Claims Act violations.

HHS-OIG also administers funding (via federal grants) for Medicaid Fraud Control Units (MFCUs), which seek to address Medicaid fraud and prevent nursing home patient abuse. The Report notes that in 2024, MFCUs recovered $1.4 billion for the government.

Overall, the Report emphasizes HHS-OIG’s efforts to maintain the integrity of the Medicare and Medicaid programs, protect patients and taxpayers, and ensure greater accountability for bad actors.

Greater Monetary Impact in 2025

Compared to HHS-OIG’s Spring 2024 Semiannual Report to Congress, covering the period from October 1, 2023-March 31, 2024, the Report indicates a greater monetary impact for OIG’s recent activity.  The 2024 report announced $2.76 billion in recoveries resulting from audits and investigations, while the 2025 report identifies nearly $4 billion in receivables from audits and investigations.  The Report claims OIG had a total monetary impact of $16.61 billion over the relevant period, with much of that number attributable to potential cost savings.  However, the government does not realize the $12.65 billion in potential cost savings unless it implements the Report’s 165 recommended changes.  Regardless, the Report reflects significant work to prevent, identify, and recover the financial abuse, waste, and risk of healthcare fraud.

Report Conclusions

The Report concludes with data-driven recommendations and a review of changes that were implemented during the audit and evaluation period. During the period covered in the Report, HHS and non-HHS entities implemented 290 HHS-OIG recommendations that ultimately saved $1.77 billion. Most of these recommendations involved preventing, detecting, and deterring fraud, waste, and abuse.