EXCLUSIVE: Sen. Rick Scott Is Moving To Ensure Blue States Have To Fight Medicaid Fraud

Congress is ramping up its efforts to combat healthcare fraud in states reluctant to comply with fraud-recovery programs, the Daily Caller learned.

A bicameral bill introduced Thursday closes loopholes in the Medicaid Recovery Audit Contractor (RAC) program, forcing states to cooperate with federal efforts to tackle healthcare fraud. (RELATED: Obamacare Enrollment Fraud May Cost Taxpayers Billions In 2026, New Study Shows)

The “Medicaid RAC Improvement Act of 2026,” introduced by Republican Florida Sen. Rick Scott and Republican Florida Rep. Gus Bilirakis, “closes loopholes” in the 2010 Medicaid RAC program “so all states participate in the RAC program, and expands the Medicaid RACs improper payment review authority ensuring waste and fraud don’t slip through the cracks,” according to a press release first obtained by the Caller.

Medicaid RAC Improvement Act of 2026 

Congress created a pilot program in Medicare for contractors to eliminate fraud in 2003, raking in $1.03 billion in fraud within three years. The program was expanded to Medicaid in 2010.

Despite the expansion, Medicaid still paid $37 billion in improper payments in 2025 alone. The Centers for Medicare & Medicaid Services (CMS) allows states an exemption from the program, either in full or in part.

According to CMS, “states have considerable flexibility regarding the design, procurement, and operation of their RAC programs.”

The RAC Improvement Act requires that all states submit “annual, detailed reporting from a State with an approved RAC exception […] that includes an overview of the State’s Medicaid RAC program, including methodologies and justifications for audit limits or exclusions applied under the program,” the text of the bill reads.

The U.S. Government Accountability Office (GAO) has placed Medicaid on its “High Risk List” for programs, “with serious vulnerabilities to waste, fraud, abuse, or mismanagement.”

GAO found that 35 states and the District of Columbia were not participating in the Medicaid RAC program in 2021.

The Department of Health and Human Services’ Office of Inspector General found in June that California received at least $13.9 million more in Medicaid reimbursements than federal and state requirements allowed. A House review ranked the blue state second for Medicaid fraud in 2022, behind Texas. (RELATED: California Faces Election Fraud Investigations Amid Major Vote Count Delays)

The Justice Department charged 455 defendants with over $6.5 billion in alleged Medicaid fraud in its “2026 National Health Care Fraud Takedown,” announced Tuesday. Acting Attorney General Todd Blanche called the Takedown the “greatest whole-of-government effort to combat health care fraud in our Nation’s history.”

Senate Committee on Aging Chairman Scott said in the RAC Improvement Act press release, “When waste, fraud, and abuse siphon off resources from programs that hardworking Americans rely on, it hurts everyone. We’re seeing it happen in real time, from Ohio to California, and all while our country has $40 trillion in debt, we can’t afford to be handing out a single dime in bad payments.”

“This bill will add oversight to Medicaid, ensuring resources are going to the people who need it the most—not fraudsters who scam the system,” the chairman added.

Rep. Bilirakis explained the act “strengthens transparency, accountability, and oversight so we can better safeguard taxpayer resources while preserving the integrity of this essential program. Protecting Medicaid’s integrity is not only about safeguarding taxpayer dollars — it is about ensuring the program remains strong and sustainable for the individuals and families who depend on it.”

Ashley Brasfield contributed to this report.