Medicaid improper payments totaled $31.1 billion in FY2024, and new research from the Hern Policy Institute (HPI) finds that the scale of those errors is equivalent to the annual workload of roughly 10,000 to 25,000 physicians.

The report, Medicaid Fraud & Improper Payments in Context, translates federal improper payment estimates into health system capacity equivalents, including physician visits, prescriptions and Medicaid enrollment levels.

When expressed in real-world healthcare terms, the FY2024 improper payment total corresponds to:

·      311 million physician visits

·      479 million prescriptions

·      The equivalent coverage of 3.9 million full-year Medicaid enrollees

Rather than examining improper payments solely as a fiscal issue, the analysis introduces a capacity-based framework that measures the scale of payment errors relative to healthcare system throughput.

“In recent years, patients across the country have faced rising healthcare costs and strained access to care,” said Robert Aery, executive director of the Hern Policy Institute. “Our framework illustrates that Medicaid fraud and improper payments may increase pressures on the healthcare system that extend beyond the Medicaid program. By translating these financial measures into comparable healthcare service and physician-capacity equivalents, this paper provides important context for understanding the scale of payment errors and fraud and establishes a foundation for future empirical research.”

The study emphasizes that improper payments do not necessarily represent fraud or services that did not occur. Instead, the analysis compares the magnitude of payment errors to the capacity of the healthcare system to illustrate scale relative to physician workforce constraints.

Key Findings

Improper Payments (FY2024)

• $31.1 billion in improper payments
• Approximately $315 per Medicaid enrollee
• Equivalent to 311 million physician visits
• Equivalent to 479 million prescriptions
• Equivalent to 3.9 million full-year Medicaid enrollees

Fraud Recoveries (FY2024)

• $1.37 billion recovered through enforcement efforts
• Equivalent to 13.7 million physician visits
• Equivalent to 21 million prescriptions
• Equivalent to 171,000 full-year Medicaid enrollees

Physician Capacity Displacement

• Estimated 10,000–25,000 physician-equivalent workloads in FY2024
• Estimated 12,000–30,000 physician-equivalents projected for FY2025
• The high-end estimate equals roughly one outpatient visit per Medicaid enrollee annually

The report includes full methodology, sensitivity modeling, and comparisons to national physician workforce data. The full report and detailed methodology are available at hernpolicy.org.