Gov. Mike Braun has made combating waste, fraud and abuse a key part of his agenda. Attorney General Todd Rokita in February celebrated $100 million recovered in Medicaid provider fraud since 2021, including money clawed back from overbilled health services and drug theft.
But neither Braun’s agenda nor Rokita’s recoveries touch the biggest pot of allegedly stolen Medicaid money in Indiana.
A federal whistleblower lawsuit that first made headlines in 2024 accuses hospitals and insurance companies of defrauding the state’s Medicaid program out of up to $724 million. A judge dismissed it once already and could dismiss it again. The state needs to intervene.
That lawsuit was dismissed in 2025 in part because the plaintiffs couldn’t prove the government cared. The plaintiffs refiled it and are waiting on a judge’s decision.
Indiana stopped looking for fraud, started paying back hospitals
The original complaint alleged that in late 2017, state Medicaid officials started “bowing to political pressure exerted by the health insurers’ and the hospitals’ lobby” and curtailed efforts to recoup improper payments.
Then-Gov. Eric Holcomb had close ties with hospital and healthcare lobbyists. He received significant campaign contributions from industry executives and maintained a revolving door of top administrative advisers who transitioned directly into lobbying roles.
During Holcomb’s tenure, the state saw a large drop in improper payment recovery from healthcare providers. That coincided in part with the COVID-19 pandemic and in part with a contractor switch. In fiscal year 2022, the state ended its fraud and abuse recovery contract with IBM, which had acquired the original vendor, Truven Analytics, and gave the work to Deloitte Transactions and Business Analytics.
The IBM-run system delivered a positive return before the pandemic, netting Indiana $5.8 million over fiscal 2018 and 2019. Recoveries dropped in 2020 as COVID-19 disrupted operations.
Deloitte’s system, on the other hand, never paid for itself. Over three years, it cost Indiana $11.8 million while recovering $6.3 million.
Around the same time, the state flipped its approach. It spent less effort clawing back overpayments and more chasing money hospitals said they were owed.
A 2021 email from IBM employee Zachery Charlson, included as an exhibit in the lawsuit, detailed pressure from Indiana’s Medicaid program integrity director and a senior FSSA official to build algorithms searching for underpayments to providers — money the state’s contractors said hospitals claimed they were owed.
Charlson wrote that, when he questioned why the state was interested, an FSSA official told him he’d have to be “living under a rock” not to understand. Charlson polled colleagues working on other state Medicaid programs and found none were searching for underpayments. The IBM team recommended against it.
FSSA wants to recover the payments. Braun, Rokita could help
Braun has made it clear he cares about Medicaid fraud. He recently mandated an independent audit into the Indiana Medicaid program that found 27.7% of claims were missing documentation and another 16.2% had errors that may have resulted in improper payments. That’s much higher than the national improper payment rates.
The Family and Social Services Administration has taken a more active role rooting out Medicaid fraud under Braun. Indiana ended its contract with Deloitte and prioritized return on investment in the new proposal that will likely go to Myers & Stauffer.
The FSSA is trying to claw back $200 million from the state’s five largest attendant care providers after an audit revealed rampant errors, per the Indiana Capital Chronicle.
That’s a good start. Braun should step in directly and order an investigation into the Medicaid claims referenced in the lawsuit. Rokita should also intervene. That would make it clear the state has a vested interest in the outcome of the case and recovering up to $724 million in alleged improper payments.
Contact Jacob Stewart at 317-444-4683 or jacob.stewart@indystar.com. Follow him on X, Instagram, Facebook and TikTok.
This article originally appeared on Indianapolis Star: Braun, Rokita sit out Indiana’s biggest Medicaid fraud case | Opinion
Reporting by Jacob Stewart, Indianapolis Star / Indianapolis Star
USA TODAY Network via Reuters Connect
By Jacob Stewart, Indianapolis Star | USA TODAY Network
