Pennsylvania scrutinizes fraud prevention as feds put Medicaid under the microscope

by Whitney Downard, Pennsylvania Capital-Star
May 11, 2026

In the coming weeks, the federal audit of Medicaid programs across the country will enter its next steps to root out fraud following investigations in other states. But Pennsylvania’s leaders say that the commonwealth is already proactive when it comes to protecting programs from abuse.

“The Shapiro Administration takes fraud prevention extremely seriously, and we are proud of procedures we use to vet provider enrollment and monitor service provision on a regular basis – processes that the federal government has approved and that have helped Pennsylvania be recognized as a national leader in Medicaid fraud identification and prosecution,” Gov. Josh Shapiro’s office told the Capital-Star in a joint statement with the Department of Human Services.

A federal report from last year identified Pennsylvania’s Medicaid Fraud Control Unit under state Attorney General Dave Sunday as the top-ranking state for the number of criminal convictions and third overall for charges filed against those defrauding Medicaid. The commonwealth’s Office of State Inspector General reported earlier this month that it charged 310 people with public benefits fraud totaling more than $3 million in 2025.

In Medicaid fraud crackdown, feds now looking to audit Pennsylvania and 49 other states

State Secretary of the Department of Human Services Val Arkoosh said last week the state was committed to protecting Medicaid and food assistance benefits for eligible Pennsylvanians while combatting misuse. She spoke before a panel of state House Democrats in Philadelphia on Thursday.

“The phrase ‘fraud, waste and abuse’ is one we hear frequently now in public discourse. It is typically framed as an accusation of either social service program mismanagement or misuse by individual public benefit recipients, and there are suggestions that states are inattentive to these concerns,” Arkoosh continued. “These accusations bear absolutely no relationship to the reality of the work that the Pennsylvania Department of Human Services does every single day.”

Most fraud, she emphasized, came from providers, rather than enrolled individuals.

Inspector General Michelle Henry expanded, adding that combatting provider-specific fraud “is not a hypothetical concern.”

“These are healthcare providers who bill medicaid for services never rendered, vendors who misrepresent the nature of their work and contractors who falsify records to obtain government payments,” said Henry.

Long-discussed tools to prevent fraud get little traction

Letters from Centers for Medicare and Medicaid Services to the state shared with the Capital-Star show that the agency was particularly concerned about claims filed by “high-risk” providers, or those without a National Provider Identification (NPI) number.

Arkoosh revealed last week that the state will now require everyone to have an NPI within the next two or three years. Direct Care Workers employed with an agency traditionally used their employer’s number, rather than their own, meaning hundreds of thousands of people will need to register, she added as an example.

“We have to literally expand our system to accommodate that amount of volume. So we are acquiring and in the process of implementing new provider modules that will accommodate that amount of volume,” Arkoosh said. “We will really be able to have a close eye on this work.”

The nationally managed registry doesn’t require all Medicaid providers to have NPIs, though states can make that a rule. Arkoosh said newly added providers would need to register.

In regard to the timeline for full implementation, her agency alluded to staffing shortages in several healthcare fields.

“Many providers have indicated that it is costly to enroll in the Medicaid program, and that additional requirements could delay filling vacant spots and exacerbate ongoing workforce issues. This transition is occurring in a way that does not overwhelm providers and create access issues for recipients,” said a spokesperson.

The state “revalidates” — or checks — all providers every five years to meet federal requirements, but the federal government now calls for a “swift revalidation” in a tighter timeframe.

The state has talked for years about requiring NPIs or a state-level version, though a previous bill requiring it failed to muster support after its champion left office. Shapiro, when he previously served as state Attorney General, oversaw a grand jury that recommended such an anti-fraud measure and personally pushed for a “False Claims Act.”

Despite longstanding bipartisan support, the state hasn’t joined the 30 states with their own False Claims Act, which incentivizes whistleblowers to report fraud by offering a sliver of the recovered assets as a reward. Most programs explicitly focus on Medicaid, though some states like New York also have laws focused on tax compliance.

The state Senate version — which has both a Republican and Democrat sponsor — hasn’t yet had a committee hearing. The House bill, which only has Democrat sponsors, passed the chamber in July on a 136-67 vote over Republican opposition. It also hasn’t been heard in the Senate.

Henry, the state inspector general who previously worked with Shapiro at the attorney general’s office, said Pennsylvania was the largest state without such protection.

“(At the attorney general’s office), I saw firsthand what Pennsylvania lacks without a False Claims Act. The gap was not theoretical,” said Henry. “It was a recurring, frustrating constraint on what we could do for the people of Pennsylvania.”

Shapiro renewed his push for the bill in a February speech and a Republican senator quizzed Arkoosh about it in March, meaning it’s still at the forefront of some members’ minds, despite the lack of movement.

What it takes to combat fraud

Arkoosh said that individual applications are screened against 15 databases to check accuracy and screen for flags, looking at income, citizenship, residency, household composition, disability status and more every six to 12 months.

Names and information are compared to death records as well.

Of the 3.3 million applications or redeterminations, roughly 20,000 are forwarded to the Office of State Inspector General, typically. In the last year, the office pursued 674 cases worth $179 million.

Henry said that such a proactive relationship with vetting applications before paying out benefits was “unique” based on her discussions with other states’ leaders.

“I do think Pennsylvania is ahead of the game in a lot of ways,” she said. “The prevention piece is a really big component of that. A lot of states are looking at it, and it’s usually after the fact. After the benefits have gone out the door, after the taxpayer’s dollars have been lost.”

Providers are also compared to death records, though these investigations are referred to the attorney general’s office or other agencies, depending on the case.

Some workers in more flexible arrangements, such as those working in a Medicaid member’s home, must log their activities with Electronic Visit Verification — either by calling a number or using an app. In the 24-25 fiscal year, the state identified 657 cases of fraud because of this requirement, recovering $584,000, according to Arkoosh.

“We are also exploring innovative practices like leveraging data analytics, predictive monitoring, and AI assistance to review billing patterns for anomalies or concerning trends, and additional attention is given to services that are historically frequently subjects of fraud,” a spokesperson for the Department of Human Services told the Capital-Star.

Arkoosh warned that 2027 would make the agency’s work more difficult, when the federal “One Big, Beautiful Bill Act” would take effect. Under the Trump-led effort, the 750,000 low- to middle-income Pennsylvanians covered under Medicaid “expansion” will need to submit paperwork every six months, rather than annually, and meet community engagement requirements.

“Adding this level of complexity onto these programs is only going to make them more vulnerable to misuse, just simply by the volume and complexity of the work,” said Arkoosh.

States will need to log whether each member worked, volunteered or went to school on a part-time basis for at least 80 hours each month, though the law includes exceptions for certain medical conditions, full-time caretakers and others.

“The totality of that really is going to stress all of our systems, and I can imagine that (Henry’s office) is going to get a lot more than 20,000 referrals as we start to have to apply now these additional layers of scrutiny onto individuals,” Arkoosh continued. “It’s going to be quite difficult.”

Previous attempts to introduce work requirements have increased the number of uninsured residents without an increase to the number of those working. Arkoosh estimated the state would spend $50 million on technology upgrades alone, not counting the 250 people who would need to be hired to conduct that work.

Pennsylvania Capital-Star is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Pennsylvania Capital-Star maintains editorial independence. Contact Editor Tim Lambert for questions: info@penncapital-star.com.