The administration has made reducing fraud, waste, and abuse a central policy theme across federal programs. In response, the Department of Health and Human Services (HHS) is implementing a more aggressive program-integrity strategy for state-administered programs, including Medicaid and the Child Care and Development Fund (CCDF).
This strategy shifts oversight away from traditional post-payment audits toward front-loaded enforcement, including pre-payment screening, funding freezes, and conditional payment approvals. A centerpiece of this effort is the Centers for Medicare & Medicaid Services’ (CMS) Comprehensive Regulations to Uncover Suspicious Healthcare (CRUSH) initiative, which seeks to strengthen fraud detection through enhanced data reporting, advanced analytics, and expanded enforcement authorities. (CMS recently published a Request for Information on the CRUSH initiative (discussed later); comments are due March 30.)
These actions signal a broader change in federal oversight of state programs. In particular, states may face:
- Increased financial risk tied to program-integrity concerns
- Higher expectations for documentation and real-time data reporting
- Greater federal scrutiny of financing arrangements and payment practices
- Operational impacts for providers and beneficiaries
This Issue Brief outlines the policy direction driving these changes, the tools HHS is using to operationalize them, and the implications for federal grant programs administered by states.