Key Facts

Timeline of the Federal and Massachusetts Records

The <a href="https://www.gao.gov/products/gao-24-105833">Government Accountability Office’s April 2024 report</a> estimated that the federal government loses between $233 billion and $521 billion to fraud each year.



GAO based the estimate on data from fiscal years 2018 through 2022. Those years included ordinary federal operations as well as emergency pandemic spending, giving the agency several different fraud-risk environments to analyze.



The range represented approximately 3% to 7% of the federal government’s average annual obligations of about $7.4 trillion during the period.



The estimate is national. It measures fraud losses affecting federal programs, agencies, grants, contracts and payments across the government. It is not a state-by-state allocation.



Massachusetts-specific conclusions therefore require Massachusetts-specific records, such as audits, payment data, civil complaints, court judgments, settlements, restitution orders and completed recoveries.

What the Federal Fraud Estimate Measures

Fraud is designed to remain hidden. Agencies discover only part of the conduct affecting their programs, and known cases may represent only a portion of the government’s total exposure.



GAO used information from different federal programs and fraud-risk environments to estimate a reasonable lower and upper range. The lower end was $233 billion annually, while the upper end was $521 billion.



The breadth of that range reflects uncertainty in measuring concealed conduct. It also prevents the estimate from being reported as though auditors had traced every dollar to a specific recipient or case.



The figures should be described as:



A government-wide fraud-loss estimate



An annual range



Based on fiscal years 2018 through 2022



Equal to approximately 3% to 7% of average federal obligations



Separate from improper-payment estimates



Separate from adjudicated fraud cases



Separate from money recovered



That distinction keeps a national estimate from being presented as a confirmed Massachusetts loss.

Why the GAO Uses a Range

GAO reported another major number in April 2026. Federal agencies estimated approximately <a href="https://www.gao.gov/products/gao-26-108902">$186 billion in improper payments during fiscal year 2025</a>, an increase of approximately $24 billion from fiscal year 2024.



The fiscal year 2025 total covered 64 programs administered by 15 federal agencies.



An improper payment can involve:



– An incorrect payment amount



– A payment to an ineligible recipient



– A duplicate payment



– A payment made without sufficient documentation



– A payment for an ineligible service



– A payment that an agency cannot verify



– A payment affected by intentional deception



Only the last category necessarily involves fraud. For that reason, the $186 billion improper-payment estimate and the $233 billion to $521 billion fraud-loss estimate should not be added together.



The figures come from different methods and may cover some of the same underlying transactions. Combining them would create an unsupported total.

Fraud Losses and Improper Payments Are Different Measures

Massachusetts administers state and federal money through MassHealth, unemployment assistance, food benefits, education, housing, transportation and other public programs.



The state record becomes useful when it identifies a particular institution, program, payment method, period and legal status.



The most current example reviewed for this page is a MassHealth civil lawsuit filed on May 29, 2026. The <a href="https://www.mass.gov/news/ag-campbell-sues-united-healthcare-for-defrauding-masshealth-of-more-than-100-million">Massachusetts Attorney General’s complaint</a> alleges that a health insurer manipulated or retained unsupported diagnostic information to make certain members appear to require a higher level of care.



According to the state, those diagnoses increased risk-adjusted payments made through the MassHealth Senior Care Options program. The alleged conduct covered 2015 through 2025 and produced more than $100 million in claimed overpayments.



That amount is an alleged overpayment total in a pending civil case. Status: under investigation.

What Massachusetts Records Add

MassHealth Senior Care Options serves eligible adults age 65 and older through coordinated health plans. Payments can be adjusted based on members’ medical conditions and expected care needs.



A plan may receive more money when the available diagnostic record shows that a member has complex conditions or requires additional support.



Accurate coding is therefore essential. A diagnosis affecting payment should be supported by current medical records and should reflect the member’s actual condition during the relevant payment period.



Massachusetts alleges that the insurer used unsupported diagnoses and personal-care classifications to increase payments. The state also alleges that internal reviews identified inaccurate coding and that the insurer failed to return resulting overpayments.



One example described by the state concerns a member allegedly presented as needing personal-care assistance despite records indicating independence in daily activities. Massachusetts attributed approximately $133,000 in additional payments over five years to that member’s coding.



The example remains an allegation in the civil complaint. Status: under investigation.

How Diagnostic Coding Can Affect MassHealth Payments

The Massachusetts complaint alleges that the insurer received more than $100 million in overpayments by submitting or retaining inaccurate diagnostic data for elderly MassHealth members.



The state’s claims include allegations involving:



Unsupported medical diagnoses



Diagnoses retained after internal review raised concerns



Members classified as needing higher levels of assistance



Risk-adjusted payments increased by those classifications



Overpayments retained instead of returned to MassHealth



Contractual and statutory duties allegedly violated



The complaint seeks damages and other relief under state law. A final court ruling would determine civil liability and the amount owed, if any.



Until that process concludes, the more than $100 million remains an alleged overpayment amount. Status: under investigation.

What the State Says Happened

On May 29, 2026, the insurer disputed Massachusetts’ allegations and described the lawsuit as meritless. The company maintained that it had appropriately served seniors enrolled in the MassHealth program and indicated that it would defend itself in court.



That response is part of the public record. So are the state’s allegations concerning diagnostic coding, internal reviews, retained overpayments and the more than $100 million claimed amount.



The court will determine which claims are supported and what remedy applies. The case remains under investigation.

The Institution’s Response

MassHealth and participating health plans need controls that operate before payment, after payment and when internal reviews identify questionable data.

What Controls Should Protect MassHealth

The <a href="https://www.mass.gov/orgs/office-of-the-state-auditor">Massachusetts State Auditor</a> reviews state agencies and programs, including aspects of MassHealth administration. The <a href="https://www.mass.gov/orgs/office-of-the-inspector-general">Massachusetts Office of the Inspector General</a> examines fraud, waste and abuse risks involving public contracts, programs and spending.

How Massachusetts Audits Fit Into the Record

The Massachusetts record establishes that the state filed a civil fraud complaint involving more than $100 million in alleged MassHealth overpayments from 2015 through 2025.



The complaint identifies the program, insurer, payment mechanism, alleged conduct and claimed amount. It also describes how diagnostic coding can change the amount paid for individual members.



The record further establishes that:



Massachusetts identified a specific payment-control concern.



The Attorney General filed the allegations in state court.



The insurer disputes the claims.



The more than $100 million figure is an alleged overpayment amount.



The court has not issued a final damages or recovery order.



The case remains under investigation.



The GAO estimate provides national context. Massachusetts’ complaint supplies the state-level record.

What the Massachusetts Record Proves

Massachusetts’ case offers a direct lesson for Arizona’s Medicaid system. Both records show why public agencies need to test provider information, diagnostic data and billing patterns before questionable payments continue for years.



Arizona’s behavioral-health fraud record involves provider enrollment, eligibility, suspicious billing, payment suspensions, criminal cases and recoveries. The Massachusetts case adds another control question: whether diagnoses and care classifications used to increase managed-care payments are supported by current records.



<a href="https://www.tpaction.com/arizonas-2-8-billion-medicaid-sober-living-fraud-timeline-oversight-failures-and-what-is-still-happening/">Arizona’s Medicaid Sober-Living Fraud Timeline: Oversight Failures and What Is Still Happening</a> tracks Arizona’s billing surge, provider suspensions, prosecutions and recoveries.



<a href="https://www.tpaction.com/are-democratic-spending-programs-protected-by-effective-internal-controls-what-arizona-records-show/">Are Democratic Spending Programs Protected by Effective Internal Controls? What Arizona Records Show</a> examines the payment and oversight safeguards Arizona institutions are expected to maintain.



The practical lesson is clear. Arizona should publish the value of payments stopped before disbursement, overpayments identified after review, money recovered, providers suspended and cases referred for enforcement.

What this means for Arizona

Frequently asked questions

GAO’s estimate shows the scale of fraud risk across federal programs. The agency placed average annual federal fraud losses between $233 billion and $521 billion based on fiscal years 2018 through 2022.



That range is not a Massachusetts loss total. The Massachusetts record must be built from state-specific audits, complaints, judgments, settlements and recoveries.



The May 2026 MassHealth lawsuit provides that state-level evidence. Massachusetts alleges that unsupported diagnostic coding produced more than $100 million in overpayments over ten years. The insurer disputes the allegations, and no final judgment or recovery order has been entered.



The case raises a serious question about how long inaccurate diagnoses or care classifications can affect public payments before state controls stop them. Its final meaning will depend on the court record and the amount Massachusetts establishes and recovers. Status: under investigation.



For related state comparisons, read <a href="https://www.tpaction.com/california-how-much-does-federal-fraud-cost-taxpayers-under-democratic-government-programs/">California: How Much Does Federal Fraud Cost Taxpayers Under Democratic Government Programs?</a>, <a href="https://www.tpaction.com/new-york-what-are-the-biggest-sources-of-improper-payments-in-democratic-government-programs/">New York: What Are the Biggest Sources of Improper Payments in Democratic Government Programs?</a>, and <a href="https://www.tpaction.com/colorado-do-democratic-policies-make-public-benefit-programs-more-vulnerable-to-fraud-what-colorado-records-show/">Do Democratic Policies Make Public-Benefit Programs More Vulnerable to Fraud? What Colorado Records Show</a>.

The Bottom Line

A large estimate or civil complaint begins the accountability process. Massachusetts residents can follow the docket, compare the state’s claimed damages with the final result and check whether public money is recovered.



<a href="http://tpaction.com/Vote">Register to Vote</a>, <a href="https://www.tpaction.com/plan">make a plan to vote</a>, and <a href="https://www.tpaction.com/getinvolved">get involved</a>. Informed participation gives voters a direct way to demand stronger payment controls and transparent reporting from public institutions.

Follow the Record Through Its Final Outcome

<a href="https://www.mass.gov/news/ag-campbell-sues-united-healthcare-for-defrauding-masshealth-of-more-than-100-million">Massachusetts Attorney General, MassHealth civil fraud lawsuit announcement, May 29, 2026</a>



<a href="https://www.gao.gov/products/gao-24-105833">U.S. Government Accountability Office, Fraud Risk Management: 2018 to 2022 Data Show Federal Government Loses an Estimated $233 Billionto $521 Billion Annually to Fraud</a>



<a href="https://www.gao.gov/products/gao-26-108902">U.S. Government Accountability Office, Fiscal Year 2025 Improper Payments Report, April 27, 2026</a>



<a href="https://www.mass.gov/orgs/office-of-the-state-auditor">Massachusetts Office of the State Auditor</a>



<a href="https://www.mass.gov/orgs/office-of-the-inspector-general">Massachusetts Office of the Inspector General</a>

Sources

See what federal fraud estimates and Massachusetts records show about public losses, MassHealth oversight, enforcement, and recoveries.

Do Federal Fraud-Loss Estimates Support Claims of Democratic Corruption? What Massachusetts Records Show

Key Facts

Timeline of the Federal and Massachusetts Records

What the Federal Fraud Estimate Measures

Why the GAO Uses a Range

Fraud Losses and Improper Payments Are Different Measures

What Massachusetts Records Add

How Diagnostic Coding Can Affect MassHealth Payments

What the State Says Happened

The Institution’s Response

What Controls Should Protect MassHealth

How Massachusetts Audits Fit Into the Record

What the Massachusetts Record Proves

What this means for Arizona

Frequently asked questions

Is this an example of Democratic corruption?

How much does the federal government lose to fraud?

How much did Massachusetts lose?

Is the $186 billion improper-payment figure another fraud estimate?

What happens next in the MassHealth case?

The Bottom Line

Follow the Record Through Its Final Outcome

Sources

RioSlum Studio

Do Federal Fraud-Loss Estimates Support Claims of Democratic Corruption? What Massachusetts Records Show

Key Facts

Timeline of the Federal and Massachusetts Records

What the Federal Fraud Estimate Measures

Why the GAO Uses a Range

Fraud Losses and Improper Payments Are Different Measures

What Massachusetts Records Add

How Diagnostic Coding Can Affect MassHealth Payments

What the State Says Happened

The Institution’s Response

What Controls Should Protect MassHealth

How Massachusetts Audits Fit Into the Record

What the Massachusetts Record Proves

What this means for Arizona

Frequently asked questions

Is this an example of Democratic corruption?

How much does the federal government lose to fraud?

How much did Massachusetts lose?

Is the $186 billion improper-payment figure another fraud estimate?

What happens next in the MassHealth case?

The Bottom Line

Follow the Record Through Its Final Outcome

Sources