'Enough is Enough' -- After 12 Years Feds Lose Patience, Decertify Hawaii Medicaid Fraud Unit

Hawai'i Free Press

Thursday, June 4, 2026

'Enough is Enough' -- After 12 Years Feds Lose Patience, Decertify Hawaii Medicaid Fraud Unit
By Andrew Walden @ 8:05 AM :: 373 Views :: Ethics, Health Care, Law Enforcement, COVID-19

EDITOR’S NOTE: After a solid 12 years of futile efforts to make Hawaii take enforcement seriously, the US Department of Health and Human Services has finally declared “enough is enough” and cut off Hawaii’s funding for Medicaid fraud enforcement. The action comes in a June 4, 2026 letter from HHS OIG Thomas Bell.

The numbers show Hawaii AGs Claire Connor and Anne Lopez kept Medicaid fraud enforcement at or near zero just as COVID fraud was spiking, thus allowing a massive wave of crooked COVID money to lubricate the system. It is noteworthy that the same COVID-fraud-enabling policy continued unabated, uninterrupted, and unquestioned from Ige/Connor to Green/Lopez.

BELOW: News coverage and key excerpts from Bell’s six-page letter.

Scroll down to see decades of Medicaid Fraud background articles.

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Feds cut funding for Hawaii Medicaid fraud unit

by Andrew Rice, The Center Square, June 4, 2026

Federal officials decertified Hawaii's Medicaid Fraud Control Unit on Thursday, citing concerns over a lack of accountability in the program.

Every state that administers Medicaid is required to manage a fraud control unit in order for funds to be properly dispersed. The attorney general in each state must maintain the control unit.

Andrew Ferguson, co-chair of the White House Fraud Task Force, said Hawaii's Medicaid Fraud Control Unit has not performed according to the Trump administration's expectations.

He said Hawaii has the lowest performing fraud control unit in the country, a problem that has dated back to 2014. Between 2022 and 2025, Hawaii obtained zero criminal indictments for Medicaid fraud or patient abuse and neglect.

Ferguson said, between 2021 and 2025, enrollments in Medicaid in Hawaii have increased by 40%, while funding increased by 27%. As the Trump administration has pursued fraud, federal officials have cited the COVID-19 pandemic as a period of increased fraudulent activity.

"For more than a decade, Hawaii's Medicaid Fraud control unit has received millions and millions of dollars to fight fraud and has consistently been one of the lowest performing fraud units in the country," Ferguson said.

March Bell, inspector general for the U.S. Department of Health and Human Services, wrote a letter to Hawaii Attorney General Anne Lopez, a Democrat, informing her of the decertification. He said the fraud control unit in Hawaii has received $3 million annually.

Bell said Hawaii's lack of arrests and convictions attributed to the decision to pull funding from the program. Without funding for the fraud control unit, Medicaid in Hawaii could be significantly impacted.

"One of the requirements for getting Medicaid money for your state is to have an effective Medicaid fraud control unit, and if you don't have one, it can jeopardize the state's access to Medicaid money generally," Ferguson said at a press conference on Thursday.

In May, the Trump administration issued notice letters to attorneys general in all 50 states, calling for greater cooperation to prosecute fraud in the federal healthcare program.

Ferguson praised the work of Ohio Attorney General David Yost in cooperating with federal fraud enforcement. Prosecutors announced charges against 14 individuals for fraud schemes in Ohio totaling as much as $50 million on Thursday. Recent reports unveiled more than $1.2 billion in potential fraud from Medicaid programs in Ohio alone.

"Avoid becoming like Hawaii, that has zero convictions and zero indictments to show for millions and millions of taxpayer dollars to fight fraud," Ferguson said.

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Trump cuts off funds to Hawaii Medicaid fraud unit over lack of cases | Reuters

REUTERS June 4, 2026: … Without a federally certified Medicaid fraud unit, the state's broader Medicaid funding could be in jeopardy.

Hawaii's unit obtained no criminal indictments or convictions for Medicaid fraud or patient abuse and neglect between 2022 and 2025, despite increased enrollment in the program, Bell wrote. The state can ask for reconsideration, according to the letter….

read … Trump cuts off funds to Hawaii Medicaid fraud unit over lack of cases | Reuters

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PDF: FULL TEXT OF HHS OIG LETTER June 4, 2026

EXCERPTS FROM LETTER:

American taxpayers provide nearly half a billion dollars every year to State governments to fund state Medicaid Fraud Control Units (MFCUs or Units), which are obligated by Federal law to use that money to effectively fight Medicaid fraud and protect patients from abuse and neglect. Hawaii receives approximately $3 million per year from American taxpayers for these same purposes.

Given this significant investment, American taxpayers rightly expect the Hawaii Medicaid Fraud Control Unit to comply with Federal law and use those millions of Federal dollars to effectively fight Medicaid fraud and protect patients in Hawaii from abuse and neglect. But Hawaii has fallen short of this expectation—and legal requirement—for many years.

For many years, the Department of Health and Human Services (HHS), Office of Inspector General (OIG) has tried to help the Hawaii MFCU improve its effectiveness. For example, OIG has conducted three onsite reviews of your Unit since 2014 and has made various recommendations to help your Unit effectively carry out its statutory fraud-fighting functions and responsibilities. While the Hawaii MFCU took action on these recommendations, it has been unable to sustain effective performance.

But these collaborative efforts have not produced the necessary results, and indeed the Hawaii MFCU’s performance has gotten significantly worse in recent years. Bafflingly, between 2022 and 2025, your Unit did not obtain a single conviction for Medicaid fraud. Even worse, it did not even obtain an indictment. Not a single Medicaid fraud indictment or conviction, despite receiving approximately 12 million Federal tax dollars to fight Medicaid fraud during that period.

Enough is enough. As explained below, the Hawaii MFCU has demonstrated that it is ineffective in fighting Medicaid fraud and has failed to comply with the terms and conditions of its MFCU grant award. OIG therefore cannot certify that your Unit has shown that it is effectively carrying out its statutory fraud-fighting responsibilities and will not make further payments to your Unit.

Via this letter, OIG is denying the Hawaii MFCU recertification request submitted on April 2, 2026. This letter serves as written notice and explanation of OIG’s findings on which the denial is based (42 CFR § 1007.17(d)). In sum, the Hawaii MFCU for many years has not effectively carried out, and is not currently effectively carrying out, its statutory fraud-fighting functions and requirements.

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The Hawaii MFCU is not effectively investigating fraud. As detailed below, the Unit’s reported performance statistics from 2021 through 2025 support that conclusion and demonstrate a sustained failure to meet its grant responsibilities. The Hawaii MFCU has only obtained four fraud convictions during that time, with all four convictions occurring in 2021. From 2022 through 2025, the Unit reported zero fraud convictions for each year. Similarly, in the last 5 years, the Hawaii MFCU has only obtained one indictment; the indictment occurred in 2021. From 2022 through 2025, the Unit reported zero indictments each year. From 2021 through 2025, the Unit obtained 30 civil judgments and settlements. Twenty-three of the thirty investigations are global settlements investigated and developed by other entities, rather than cases investigated or advanced by the Unit. These 23 global settlements resulted in total civil recoveries of $630,828. The seven civil cases that the Hawaii MFCU investigated from 2021 to 2025 resulted in civil recoveries of $11,319,148, nearly all of which is from one case in 2023 that resulted in civil recoveries of $11,050,000. The Hawaii MFCU’s reliance on global settlements for the vast majority of its civil investigations does not demonstrate that the Unit is operating an effective fraud control operation.

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The Unit’s low outcomes for Medicaid fraud investigations from 2021 to 2025 are even more concerning given the growth of the Hawaii Medicaid program over the similar time period. Despite significant growth in the Hawaii Medicaid expenditures and enrollment, the Hawaii MFCU saw no increase in investigative outcomes. Based on OIG’s enforcement experience, fraud increases when there is sudden, significant growth in Government programs. However, the Hawaii MFCU’s performance does not match that growth of Hawaii Medicaid over the last several years.

From 2020 to 2022, the Hawaii Medicaid program grew from $2.68 billion to $3.1 billion, an increase of almost 20 percent. Hawaii Medicaid spending has remained at similar levels since 2022. The increase in Medicaid spending was primarily driven by the growth in enrollment due to pandemic-era changes in eligibility rules. Hawaii’s Medicaid enrollment grew 47 percent from 2020 to 2024, from 325,667 to 493,728. As of 2025, Hawaii reported total Medicaid enrollments of above 400,000. The Hawaii MFCU’s oversight responsibilities grew to cover a $3 billion program that provides health care coverage for nearly 30 percent of Hawaii’s population. Yet during this timeframe, the Hawaii MFCU had zero convictions or indictments from years 2022 through 2025. Through civil judgments it recovered almost $14 million from 2021 to 2025. The civil recoveries amount to less than .01 percent of Hawaii’s Medicaid expenditures from the same time period.

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During its April 2026 onsite review, OIG obtained information and made observations that the MFCU is not adhering to several Performance Standards. The Hawaii MFCU continues to struggle to appropriately staff the Unit in adherence with Performance Standard 2. The Unit is having continued challenges related to referral volume and quality in adherence to Performance Standard 4. The Unit is not managing its case information effectively and is not making reasonable, timely progression on investigations in adherence to Performance Standards 5 and 7.

The Hawaii MFCU has a history of repeated instances of nonadherence with the Performance Standards. In the 2014 and 2019 onsite reviews, OIG identified 12 findings related to the Unit’s adherence with the Performance Standards. In the 2014 onsite review, OIG found the Unit did not regularly communicate with Federal agencies regarding health care fraud, and the Unit did not have written policies or procedures specific to its operations. And in 2019, the onsite review found that the Unit had significant turnover of investigators and had few fraud cases to train new, inexperienced investigators; pursued few nonglobal civil fraud cases; and received few fraud referrals. OIG made recommendations, provided technical assistance, and provided other support to help the Hawaii MFCU improve its adherence to the Performance Standards. Notwithstanding this assistance, the Hawaii MFCU continues to fall short of acceptable adherence to the Performance Standards.

In assessing the recertification factor under 42 CFR § 1007.17(c)(3), OIG determined that the Hawaii MFCU has failed to adhere to the Performance Standards since 2014. The Unit’s longstanding and continued challenges with adhering to the Performance Standards demonstrate that it has not effectively carried out its statutory functions.

PDF: FULL TEXT OF HHS OIG LETTER June 4, 2026

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BACKGROUND: