Healthcare Fraud Is Real, and It's Not Coming from the Waiting Room

While politicians target Medicaid recipients with paperwork traps, billions disappear through corporate fraud.

I. What They Say vs. What's Real

We hear it all the time: The system is full of fraud, waste, and abuse.

And in response, the government cracks down…on the poor.

Medicaid recipients are asked to reverify their eligibility, prove they're working, confirm their income down to the dollar, and submit paperwork in systems designed to reject them. All in the name of "integrity."

But here's what you won't hear in most press conferences: the biggest healthcare fraud bust in U.S. history just happened. Not one Medicaid mom. Not one low-income elder. Not one "freeloader" in sight.

Instead, the charges targeted:

• Physicians who prescribed opioids for profit

• Lab operators who faked test results

• Durable medical equipment (DME) companies that billed for items never delivered

• Fraudulent mental health and addiction treatment centers

• Corporate executives who engineered multi-million-dollar billing schemes

This wasn't about patients gaming the system. This was the system being looted from within.

II. The $14.6 Billion Heist

According to the Department of Justice, this year's healthcare fraud takedown, dubbed Operation Gold Rush, is the largest in U.S. history.

More than $14.6 billion in false claims.

Over 300 defendants across the country.

And the victims? Medicare, Medicaid, TRICARE, and real people, often low-income, elderly, or in addiction recovery.

The scale is staggering. In Florida, California, and Michigan, laboratories and medical supply companies submitted fraudulent claims. Some defendants used the identities of unhoused people or nursing home residents to bill for services they never received.

Others ran fake addiction treatment centers, enrolling people in sham programs just long enough to bill insurance before kicking them out. One mental health facility in Georgia falsely claimed to be providing psychiatric services to children with autism while submitting fake claims for millions.

And behind many of these schemes were people in suits: executives, operators, consultants, and clinicians who knew how to work the codes and exploit the system.

This wasn't a one-off; it was a well-oiled, multi-state enterprise intentionally designed to siphon taxpayer money out of federal programs meant to serve the vulnerable.

And yet, despite all this, the people we choose to surveil and scrutinize aren't the ones submitting the invoices.

III. Meanwhile: Work Requirements and Coverage Loss

Here's what's happening in parallel to the massive fraud bust:

States and the federal government are intensifying their efforts to target Medicaid recipients with stricter work requirements, increased paperwork, and more stringent re-enrollment checks.

• The newly enacted One Big Beautiful Bill Act introduces an 80-hour monthly work or community engagement requirement for adults aged 19–64 on Medicaid, including those with dependents.

• It also adds a $35 co-pay per service, mandates income verification every six months, and strips Medicaid from groups like immigrants, LGBTQ individuals in rural areas, and providers of gender-affirming care.

• By 2034, nearly 12 million people could lose coverage, according to nonpartisan estimates.

• CMS's new Marketplace Integrity and Affordability rule requires states to verify 75% of special enrollment period applications by 2026, adding a bureaucratic barrier that often leads to wrongful denials.

It gets worse: Medicaid recipients are already working. KFF analysis shows that most able-bodied adults on Medicaid are employed or seeking work; it's the paperwork, not a lack of willingness, that causes the drop-off. In Arkansas and Georgia, mandatory reporting requirements cost thousands their coverage while yielding zero employment gains.

Contrast that with the fraud findings:

No one is scrutinizing lab owners or DME executives to confirm they are "earning" their reimbursements or verifying their coding. The focus isn't on who is submitting claims for services that never occurred; it's on who is receiving a $35 check from Medicaid to take their child to the doctor.

The result? We surveil the wrong people and treat the real thieves as partners.

And while lawmakers push to root out so-called "abuse" by Medicaid recipients, companies like Amazon and Walmart, two of the nation's largest employers of Medicaid-eligible workers, reap the benefits. Their employees show up, work hard, and still rely on government health coverage because their wages or benefit packages don't cover the basics.

That gap isn't a failure of the worker; it's a very intentional business model.

The irony? We write policies to monitor the people waiting in line, not the individuals whose business practices contributed to the creation of the line.

IV. Who Really Gets Protected

The Medicaid system is designed to monitor individuals who require it, including their income, hours worked, zip code, and whether they returned a mailed notice on time. But when it comes to those submitting billion-dollar claims, oversight becomes… negotiable.

High-level fraud isn't sloppy. It's strategic. It's layered into billing systems, consulting networks, and just enough compliance language to pass an audit. And when it gets caught, it's rarely career-ending.

Take Gilead Sciences, for example. Earlier this year, they paid $202 million to settle allegations that they offered illegal kickbacks to doctors who prescribed their HIV drugs; trips, honoraria, speaker gigs, you name it.

The case involved Medicare and Medicaid billing fraud. But no one went to jail. There were no indictments. Just a fine and a statement.

Compare that to the Medicaid recipient who misses a redetermination deadline and loses coverage for a cancer screening or prenatal visit.

We don't just punish fraud unequally. We protect it unequally, too.

Fraud at the top isn’t new. It’s not a glitch in the system, it’s a legacy.

To really understand how we got here, you have to look at the foundation of American healthcare. From the beginning, it’s functioned less like a safety net and more like a VIP club.

For some, there’s a velvet rope, a short wait, and an open bar of options.

For everyone else? A long line, a dress code you weren’t told about, and a bouncer checking your papers at the door.

Access wasn’t built to be universal. It was built to reward those who fit the mold and discipline those who don’t.

V. This Isn't New

The velvet rope has always been there; it's just taken on a different form.

There's a long history of exploitation and profit baked into the foundation of American healthcare. What we're seeing today is simply the latest iteration of a system that has always protected power while policing poverty.

In the 19th century, hospitals and almshouses often segregated patients by social class. The poor were packed into crowded charity wards, while the wealthy received private rooms and were visited at home. But class wasn't the only sorting mechanism—race was, too.

Many hospitals were segregated by law or policy well into the 20th century. The few facilities that served Black communities were consistently underfunded, understaffed, and denied access to the same public resources as white institutions. When Medicare was introduced in 1965, the federal government leveraged funding to force hospital desegregation, but that shift wasn't purely moral. It was economic.

Fraud still found a way in. From inflated billing at hospitals that finally admitted Black patients to predatory practices at under-regulated facilities in marginalized communities, the profit motive didn't disappear; it just adapted.

And yet, the public rhetoric didn't follow the money.

It turned inward toward the idea of the "undeserving."

Welfare queens. Drug seekers. Freeloaders.

Not providers. Not executives. Not shareholders.

Fraud has always existed in this system, but scrutiny has rarely followed where the dollars actually go.

The burden of "proving value" or "proving you matter" (to quote Dr. Oz) has always fallen hardest on the people furthest from power.

VI. What Real Accountability Looks Like

If we're serious about stopping fraud, we must stop pretending it only exists in the margins.

Real accountability means following the money, not the food stamp recipient, but the billing consultant, the shell company, the chain pharmacy, and the middle manager who signs off on the codes.

It means shifting our enforcement lens from a survival mindset to a strategic one. People gaming the system to survive doesn't cost the government billions of dollars. Corporations gaming the system to maximize profit do.

Here's what that shift could look like:

• Audit up, not down. Start with institutions. Review large-scale billing patterns, not just individual claims.

• Fund whistleblower protections. Most major fraud schemes are uncovered from the inside when workers feel safe to speak up.

• Prioritize harm, not paperwork. Losing coverage due to a missing form isn't fraud; it's a system designed to catch people off guard.

• Tie executive accountability to reimbursement. If fraud happens under your leadership, the settlement shouldn't just come from your legal team. It should come from your pocket.

None of this is radical.

It's just what would happen if we policed corporate crime with the same urgency we apply to poor people trying to get their prescriptions filled.

And the truth is the penalty is rarely a deterrent.

A billion-dollar scheme might end in a $200 million settlement. No jail time. No contract loss. No claw back of bonuses.

The company rebrands. The shareholders stay happy. The executives keep their jobs…and their healthcare.

Meanwhile, the people who needed that coverage most?

They're the ones still standing in line, paperwork in hand, trying to prove they deserve to be there.

VII. It's Not a Question of Fraud, It's a Question of Who We Choose to See as Criminal

Fraud exists. Waste happens. Abuse is real.

But the question has never been whether we hold people accountable.

It's who we choose to hold accountable and how quickly we act.

We write policies that punish the poor for asking for help while offering golden parachutes to the people siphoning billions off the top.

We shame individuals who rely on Medicaid, then turn around and sign multi-million-dollar settlement checks with companies that have built fraud into their business model.

Healthcare fraud is real. But it's not coming from the waiting room.

It's coming from the boardroom.

And until we shift our scrutiny, our audits, and our outrage in the right direction, we'll continue to protect the people who drain the system while blaming the people it was supposed to serve.