Medicare and Medicaid Fraud Enforcement History

At Barrett Johnston, we’ve seen firsthand how the federal government’s approach to Medicare and Medicaid fraud has evolved from modest oversight to one of the most sophisticated enforcement systems in the world—albeit a system that is still limited in its ability to stop fraud, waste, and abuse. Understanding that history helps explain why today’s whistleblowers are so essential to protecting these programs.

Medicare and Medicaid were established in 1965 to provide healthcare for older adults, people with disabilities, and low-income individuals. But from the very beginning, fraud and abuse emerged as major concerns. In the 1970s and 1980s, schemes like phantom billing, upcoding, and unnecessary procedures began drawing attention from investigators.

To respond, Congress passed laws such as the False Claims Act amendments of 1986, which empowered whistleblowers to report fraud and share in government recoveries. Throughout the 1990s and 2000s, landmark cases against hospitals, pharmaceutical companies, and healthcare providers demonstrated the enormous scale of the problem — and the power of enforcement.

Modern fraud enforcement is spearheaded by the Department of Justice (DOJ), the Office of Inspector General (OIG), and the Centers for Medicare & Medicaid Services (CMS). These agencies collaborate on audits, investigations, and recoveries that have returned billions of dollars to the Medicare Trust Fund each year.

Today, whistleblowers remain at the heart of this system. Their willingness to step forward continues to shape the next chapter in Medicare and Medicaid fraud prevention.