The recent health-care fraud discovery shows why data-driven oversight is so important.
Radical transparency and skin-in-the-game accountability.
T he Justice Department announced the 2026 National Health Care Fraud Takedown, which resulted in charges against 455 defendants in connection to over $6.5 billion in health-care fraud. It is encouraging that law enforcement uncovered one of the largest health-care fraud schemes in American history. But it is simultaneously alarming because it raises an obvious question: How much more fraud has not been uncovered?
The answer is a lot more than most Americans realize. The federal government officially reported that it erroneously gave out at least $184 billion in improper payments last year. That amounts to roughly $1,400 per household — more than eight weeks of gas and grocery expenses for a typical American family. Yet even that staggering figure includes only a few billion dollars in “confirmed fraud.”
The Government Accountability Office estimates that fraud at the federal level costs taxpayers between $233 billion and $521 billion every year. At the upper end, that equals almost two months of rent or mortgage payments for every household in America. And unlike improper payments, which are often unintentional, fraud is deliberate theft.
The federal government lacks the basic accounting systems necessary to track trillions of dollars after they leave the Treasury, which makes fighting fraud a lot harder than it needs to be.
Every year, Americans must meticulously file and pay their taxes. Employers issue W-2s. Financial institutions issue 1099s. Taxpayers who fail to properly report income face penalties, audits, and potential prosecution by the IRS.
Yet when Washington redistributes $4.2 trillion in taxpayer dollars, through more than 100 benefit programs, there is remarkably little accountability. We often know the first recipient, such as a state government that administers Supplemental Nutrition Assistance Program (SNAP) or Medicaid. But we don’t currently have the infrastructure in place to follow the money from beginning to end.
The recent health-care fraud discovery shows why data-driven oversight is so important. Federal officials credited enhanced analytics, interagency cooperation, and improved information sharing as some of the tools that helped identify fraudulent patterns and uncovering schemes spanning dozens of states.
Such oversight and coordination should be the norm, but the necessary data is lacking.
Congress should use some of the recovered funds to prevent future fraud by requiring a full accounting of federal benefits. It doesn’t need to be a complicated system. It could literally be the same accounting already required of American taxpayers.
This could be achieved by introducing two new federal reporting forms: a 1099 form for benefit providers (whether a state agency, managed-care organization, nonprofit intermediary, health-care provider, or other recipient of federal funds), and a 1099 form for benefit recipients. Just as existing tax forms allow the IRS to cross-check income reported by employers and employees, these forms would allow federal auditors to compare payments made, benefits distributed, and services received.
The recently announced health-care fraud involves individuals who leveraged stolen identities to generate fake health-care claims. Since individuals whose identities were stolen wouldn’t have received or filed a benefit-receipt form with their taxes, this discrepancy would have allowed investigators to investigate further and potentially discover the fraud earlier.
Fraud thrives in darkness. Transparency creates deterrence. But transparency alone is insufficient, and accountability must follow. A third reconciliation bill could create the infrastructure and enforcement mechanisms necessary to fight rampant fraud.
Congress should expand the “skin-in-the-game” reforms recently enacted for SNAP. Under those provisions, states with persistently high SNAP payment-error rates will pay a portion of the program’s costs, instead of federal taxpayers covering 100 percent of the tab.
This principle should apply broadly across all federal programs. When states, contractors, managed-care organizations, or other intermediaries improperly distribute federal funds, taxpayers should not be paying the bill.
The administrators who fail to verify eligibility, maintain accurate records, or comply with integrity requirements should be held accountable — either by sharing in the cost of taxpayers’ money that they waste, or by being disqualified from distributing federal benefits.
Washington has treated waste, fraud, and abuse as an unfortunate cost of doing business. But Congress doesn’t have to accept this, and the American taxpayer shouldn’t either. No private company could stay in business if it allowed billions of dollars in fraud to go uncorrected.
Congress’s constitutional responsibility over federal spending does not end when taxpayer dollars leave the Treasury. Stewardship requires knowing where those dollars go and holding people accountable when they are misused.
The DOJ’s $6.5 billion health-care fraud takedown proves that fraud can be detected. The next step is establishing the transparency necessary to make finding fraud easy and the accountability necessary to prevent it from occurring again.
A third reconciliation package provides the opportunity for Congress to protect taxpayers’ money by instituting safeguards requiring that every dollar the federal government spends is subject to the same scrutiny and accountability as every dollar it takes from taxpayers.