Federal officials have moved to decertify Hawaii's Medicaid Fraud Control Unit, accusing the state of what they called an abject failure to enforce state and federal laws meant to stop fraud. The action was announced as part of a broader campaign by the Department of Justice and its partners to protect taxpayer money flowing through health programs.
According to officials, Hawaii's fraud unit has for more than a decade received millions of dollars to combat fraud while consistently ranking as one of the lowest performing units of its kind in the country. They said the unit had been the subject of repeated demands to improve its performance since 2014, a period stretching back to the Obama administration.
The numbers cited by officials were stark. They said that between 2021 and 2025, Hawaii's Medicaid funding rose by twenty seven percent and its Medicaid enrollment climbed by forty percent, yet the state did not produce a single conviction or obtain a single indictment of a fraudster across that entire four year stretch.
In response, officials said the inspector general, working in coordination with the federal fraud task force, exercised a statutory obligation to end the grants being paid to Hawaii. They framed the step as a way to ensure that money sent to the states to fight fraud actually goes toward that purpose rather than being spent without results.
Officials explained that having an effective Medicaid Fraud Control Unit is one of the conditions attached to the federal money that flows to states through Medicaid and Medicare. Without such a functioning unit, they warned, a state's access to Medicaid funding more broadly can be put at risk, raising the stakes of the decision against Hawaii.
The decertification did not come without warning. Officials said that less than a month earlier, the Department of Health and Human Services had sent a letter to every state attorney general in the country, putting them on notice for the first time that the administration intended to take seriously the requirement that each state maintain an effective fraud unit.
Officials drew a sharp contrast between Hawaii and Ohio, pointing to Ohio's unit, led by Attorney General Dave Yost, as a gold standard for fighting fraud. They urged every state to strive for arrests, convictions and real protection of taxpayers and Medicaid programs, rather than ending up, as they put it, like Hawaii with nothing to show for millions of dollars.