Congressional Republicans have brought President Trump’s “war on fraud” to Vermont. The GOP leaders of the U.S. House Energy and Commerce Committee sent a letter to Gov. Phil Scott earlier this week to demand a raft of information about Vermont’s efforts to protect its Medicaid program from fraud, waste and abuse.
Nine other states received similar letters. All but one — Nebraska — are generally considered blue states.
“Fraud shouldn’t be a partisan issue. It's our most vulnerable Americans who are most at risk from fraudsters diverting precious resources intended for critical, needed care,” Energy and Commerce Chairman Rep. Brett Guthrie, a Kentucky Republican, said in a statement.
A massive Medicaid fraud scandal in Minnesota has reinvigorated the Trump administration’s pledge to root out fraud in government programs, and the Centers for Medicare and Medicaid Services has since withheld over $200 million Medicaid funds from the midwestern state. Minnesota filed suit earlier this week, alleging that the Trump administration had “weaponized Medicaid against Minnesota as political punishment.”
During his State of the Union speech last week, Trump announced he would launch a “war on fraud,” to be led by Vice President JD Vance, that would expand to other states.
“We will actually have a balanced budget overnight. It’ll go very quickly. That’s the kind of money you’re talking about,” Trump said.
Vermont’s Medicaid program, which includes the children’s program Dr. Dynasaur, provides health insurance coverage to about 157,000 residents. The publicly funded program is paid through a mix of state and federal dollars, and totaled $2.3 billion in fiscal year 2024.
The congressional letter suggested Vermont had been selected for additional scrutiny because it “broadly defines Medicaid eligibility” and administered several programs “considered high risk” for fraud, including behavioral health and home care services.
There is no reliable, nationwide measure of fraud against Medicaid. But the federal government does calculate a rate for “improper payments,” which mostly captures administrative errors but also includes fraudulent activity. The last time Vermont was audited, in 2023, its error rate was 5.6%, slightly lower than the most recent nationwide average of 6.1%.
The state has been given until March 17 to compile information sought by the congressional committee, including all Medicaid audits dating back to 2021. The state’s Medicaid director, Jill Mazza Olson, said her office plans to comply.
“I feel really confident about our ability to answer the questions, and that's really where we're keeping our focus right now,” she said.
Critics say that cuts to Medicaid baked into Trump’s “Big Beautiful Bill” could actually undermine institutional checks against fraud. And Democrats have been quick to point out that the president has not been shy about pardoning former health care executives convicted of bilking Medicare and Medicaid for millions of dollars.
California has also been targeted by the congressional probe into Medicaid. On Thursday, Gov. Gavin Newsom’s office released an analysis claiming that the president’s pardons and commutations had cost victims and the public nearly $2 billion in restitution payments.
