Balance Needed to Fight Fraud, Waste in Medicare, Other Health Programs, AARP Says

Government actions shouldn’t block or delay legitimate care

Tony Pugh,

AARP

Comments

Published March 31, 2026

Illustration of a hand writing on a notepad in front of a Medicare health insurance card labeled “John Smith,” with floating paperwork, dollar bills, and a stack of documents nearby; the U.S. Capitol building appears in the background, suggesting government and healthcare policy.

AARP (Getty Images, 6)

Key takeaways

To save money, punish scammers, not Medicare enrollees.
One state’s Medicaid money withheld. Medicare also affected.
Test of original Medicare prior authorization problematic.
Delays, denials from this pilot project already being felt.

AARP gave federal health officials a list of proposals Monday designed to cut fraud and improve accountability, oversight and savings.

The seven-page letter highlights AARP’s support for efforts to root out fiscal malfeasance and waste in Medicare, Medicaid and the health insurance marketplace, including responsibly using artificial intelligence (AI) to identify and thwart fraudulent billing, reducing the time that providers can file a Medicare claim, not overpaying for care in Medicare Advantage and prohibiting deceptive advertising from medical goods suppliers.

But AARP, the nation’s leading advocacy organization for 125 million Americans age 50 and older, also expressed opposition to some fraud prevention strategies that could create “unnecessary barriers to care and coverage for innocent Americans who rely on these critical services.”

“Innocent individuals should never be forced to pay the price [for Medicare fraud or waste], whether through broad-stroke efforts that withhold or defer payments to states, delays in needed care, barriers to services like home- and community-based services or burdensome bureaucratic hurdles that jeopardize their well-being,” says Megan O’Reilly, AARP vice president for health and family issues.

Some money already withheld, new suppliers paused

The letter responds to a request from the Centers for Medicare & Medicaid Services (CMS) for suggestions to reduce abuse, fraud and waste in Medicare and other federal health programs.

“We believe this can be accomplished in ways that target the bad actors and do not get in the way of enrollees receiving needed care,” AARP says.

Join our fight to protect Medicare

AARP is working to keep Medicare strong. Here’s how you can help.

Sign up to become an AARP activist for the latest news and alerts on issues you care about.
Find out more about how we’re fighting for you in Congress and across the country.
See the latest AARP research on Medicare and more.
AARP is your fierce defender on the issues that matter to people 50-plus. Become a member or renew your membership today.

The federal government withheld $259 million in Medicaid money for Minnesota amid an investigation, begun in January, of questionable claims. The state filed a lawsuit in March.

In February, Medicare enrollment of some new durable medical equipment suppliers was paused nationwide following investigations of widespread fraudulent billing.

The same anti-fraud initiative could also drive expanded use of AI to “identify fraud instantly and stop improper payments before they go out the door,” says Secretary Robert Kennedy Jr. of the Department of Health and Human Services.

Requiring providers who participate in Medicare Advantage to also enroll in original Medicare would help CMS “track fraudulent providers across plan networks and communicate the existence and status of any investigations,” AARP says. The agency also needs to beef up its oversight and enforcement, noting that “law and regulation provide a strong anti-fraud framework but are unevenly applied due to insufficient resources and personnel to meet demand.”

Program to expand prior authorization is pain point

A new six-year, six-state CMS pilot program designed to cut unnecessary care costs in original Medicare raises additional concerns for AARP.

It requires that 13 procedures and services receive prior authorization, essentially coverage preapproval. The practice is standard in Medicare Advantage plans, the private alternative to original Medicare, but is used rarely in original Medicare — except for some items such as durable medical equipment and certain outpatient services.

However, some lawmakers, regulators and researchers say Medicare Advantage plans use prior authorization improperly to deny care, and its use in original Medicare raises concerns. AARP opposes the pilot program’s expansion of prior authorization in original Medicare.

Unlike original Medicare, which pays each service provided, Medicare Advantage plans get a certain amount each month per enrollee to cover their full cost of care. The payments are meant to encourage plans to provide care more efficiently, and prior authorization helps in that effort.

Delays, denials in care are already a problem

In the six pilot program states, affected AARP members are speaking up.

“We are already hearing from members impacted by the WISeR [Wasteful and Inappropriate Service Reduction] prior-authorization demonstration project” that began in January, says Andrew Scholnick, a government affairs director at AARP. “The extra layer of review is causing confusion, delays in care and even some denials.”

AARP has shared members’ stories with Medicare leadership and continues to advocate for improvements to the demonstration program, Scholnick says. AARP is working to fight fraud and abuse without putting burdens on Medicare enrollees.

About 2.7 million beneficiaries in Oklahoma and Texas, 1.5 million in Arizona and Washington state, and 1.1 million each in Ohio and New Jersey are subject to the pilot program’s requirements, according to estimates by McDermott+, a Washington, D.C.–based health care consulting firm. But only those beneficiaries referred for one of the targeted procedures are affected.

The pilot also allows participating technology companies to keep a portion of any savings Medicare achieves from the companies’ denial of provider claims. AARP is troubled by savings-based payments that create “a clear incentive to deny care,” its letter says.

“AI can and should play a constructive role in Medicare. But its purpose should be to identify and stop fraudulent or improper payments — not to substitute for medical judgment or punish patients for fraud committed by providers,” AARP says.

%{postComment}%

Tony Pugh is an award-winning writer and editor covering Medicare for AARP. He has also covered Medicare for Bloomberg Law and as a national correspondent for Knight Ridder/McClatchy Newspapers.