by James C. Sherlock
Medicaid fraud is not a new issue, but it has exploded into the public consciousness as the Trump administration has taken action against it. Virtually every critique of Medicaid fraud, from both sides of the debate over how pervasive and costly it is and what to do about it, has been written from a Washington perspective. This article will offer a Virginia perspective. It is not a pretty one.
As of early 2025, more than 1.7 million people are enrolled in Virginia Medicaid, including over 595,000 covered under the expansion guidelines. Mental health, substance use, home care, nursing home services, and support services for the intellectually and developmentally disabled are major sources of fraud nationwide and in Virginia.
Medicaid, established in 1965, is a joint federal and state program fundamental to the health of the poor and disabled. It is rife with fraud because states that manage it have perverse incentives to police it, driven by the predominance of federal funding.
Only a fundamental change in the funding mechanism will drive significant reductions in Medicaid fraud.














