The federal government is done playing defense on healthcare fraud. The Department of Health and Human Services is now using artificial intelligence to proactively review audits submitted by states and grantees, with the explicit goal of identifying fraud, waste, and improper payments before the money goes out the door.
The initiative targets Medicaid, research grants, addiction services, and childcare programs.
What the crackdown actually looks like
HHS Secretary Robert F. Kennedy Jr. and CMS Administrator Dr. Mehmet Oz have positioned this as a cornerstone of the administration’s push for healthcare affordability. The effort was formally announced on February 25, 2026, with Vice President J.D. Vance also involved in the rollout.
For years, the government operated on a “pay and chase” model, meaning it would send money to states and providers, then try to claw back funds after discovering fraud. Now, real-time AI tools are being deployed to flag suspicious patterns in annual audits before disbursement happens.
