Key facts
- Hawaii's Attorney General Anne Lopez defended the state's Medicaid fraud unit, citing $14 million in settlements.
- Most of the recovered funds, $13 million, came from a single case initiated over a decade ago.
- The Inspector General of HHS will not recertify Hawaii's Medicaid Fraud Control Unit, leading to a loss of federal funding.
- The unit's efforts were deemed insufficient, with total recoveries representing less than 1% of Medicaid expenditures from 2022-2025.
- The Inspector General's office noted that the majority of settlements came from one case involving Liberty Dialysis.
Hawaii's Attorney General Anne Lopez has defended her state's Medicaid fraud unit against criticism from Vice President JD Vance, who highlighted a lack of convictions. Lopez pointed to $14 million in settlements secured by the unit. However, an investigation revealed that $13 million of this amount stemmed from a single case initiated over a decade ago, raising significant concerns about the unit's overall effectiveness.
The Inspector General of the U.S. Department of Health and Human Services, T. March Bell, informed Lopez and fraud unit director Landon Murata that he would not recertify the unit, effectively withdrawing federal funding. Bell stated that the Hawaii Medicaid Fraud Control Unit (MFCU) was ineffective and failed to comply with its grant award terms, emphasizing that the majority of recovered funds came from one settlement.
This single settlement involved Liberty Dialysis, a subsidiary of German company Fresenius Medical Care, which continued to submit claims after receiving erroneous reimbursements. The case was initiated in the 2010s, and a lawsuit was filed in 2015 by then-Attorney General Doug Chin. The final settlement was reached three years ago, not by the fraud unit itself, but by the Attorney General's civil recoveries division.
State Senator Brenton Awa questioned the unit's performance, asking what they were truly accomplishing if most of the funds came from an old case. Bell's letter also noted that Hawaii's total recoveries from 2022 to 2025 represented less than 1% of its Medicaid expenditures. Other cases brought in only $182,000, with a recent $208,000 settlement involving a doctor for fraudulent ultrasound claims.
Murata, the fraud unit director, argued that indictments and convictions do not fully characterize the unit's effectiveness and that its overall body of work should be considered. He acknowledged the federal government's concerns and stated that additional resources would be mobilized to review findings and strengthen enforcement efforts. He also claimed that Hawaii's unit had outperformed similarly staffed peers in civil and criminal settlements since 2021.
Nationally, Medicaid fraud units recorded 3,433 fraud convictions and recovered $5 billion in criminal and civil settlements between fiscal years 2022 and 2025. Hawaii's record of convictions stands in stark contrast to these figures.