A task force focused on finding ways to better combat Medicaid fraud is recommending the state add more staff, provider verification measures and higher penalties for fraud, according to a final report released by the governor Thursday.
Gov. Kim Reynolds formed the task force in July via executive order, in the wake of a series of federal actions aimed eliminating waste, fraud and abuse in Medicaid. This includes a task force chaired by Vice President JD Vance aimed at combatting fraud in public assistance, and the Centers for Medicare and Medicaid Services directing states to revalidate “high-risk” providers, announcing every state’s Medicaid Fraud Control Unit (MCFU) would be federally reviewed.
The task force held their fourth and final meeting Tuesday. Opponents, including former agency heads under Democratic governors, have criticized the task force as “political theater” ahead of the midterm elections.
In a statement when the report was released, Reynolds thanked members of the task force for “strengthening Iowa’s Medicaid system” and said their recommendations will help support the program’s long-term viability.
“Their efforts will help make it one of the most accountable and secure in the nation,” Reynolds said. “While we work to protect Iowa taxpayers’ investment in these programs, we’re equally focused on ensuring that quality care and services are available for every eligible Iowan who relies on them."
Increasing staffing for MCFU
The report recommends the state increase staff at the Iowa’s MCFU from nine members to 24. Iowa’s current level of staffing falls below many states with similarly sized Medicaid budgets.
MCFUs are required by every state per federal law. The units are tasked with investigating and prosecuting Medicaid provider fraud as well as patient abuse and neglect.
Proposed staff would include dedicated prosecutors and additional investigators, data analysts and a nurse investigator. The additional prosecutors would also work in the Attorney General’s office as part of a new civil fraud enforcement unit.
Between FY2013 and FY2025, Iowa Medicaid spending grew 129% while the unit’s budget grew by 31%, according to the report. The unit oversaw $8.73 billion in Medicaid spending in FY 2025.
Eric Wessan, Iowa's solicitor general, called the proposed bump in staffing a “bargain” for taxpayers. Federal dollars make up 75% of MCFU funding and increasing staff could draw in $1.43 million in additional federal dollars, per the report.
“Every dollar committed to fighting fraud, waste, and abuse has a superb return on investment,” Wessan said. “That is benefit on benefit to protect both Iowa's most vulnerable and the Iowans about to pay for these vital services.”
Increasing public awareness, penalties
The final report also includes a slate of recommendations to better monitor and respond to fraud allegations more quickly, and to grow public awareness on how to report Medicaid fraud.
The report recommends creating an “Iowa Medicaid Fraud War Room” that aligns with the federal model and can suspend payments to providers within 24 hours when credible allegations emerge. It also suggests making Medicaid fraud reporting tools more user-friendly.
Task force members recommended the state revalidate “high-risk” providers. They said the state should add an “anti-kickback” statute, an administrative civil monetary penalties law and make Medicaid fraud a class D felony.
Former department heads push back
Speaking to reporters after the meeting, attorneys Dean Lerner and Kevin Techau, criticized the task force as a “sham” intended to create “political headlines” ahead of Bird’s reelection bid.
Lerner formerly served as the director of the Department of Inspection and Appeals under Democratic Gov. Chet Culver and Techau served as director of the department under Democratic Gov. Tom Vilsack.
Techau accused Reynolds and Bird of a “failure of leadership,” claiming the state could have tapped into more federal funds earlier.
“I think the question needs to be given back to the governor and to the attorney general, ’What's taken you so long? Why have you left millions of Medicaid fraud on the table?’” Techau said. “Because you haven't been aggressive. You haven't used all the tools available to you over the last several years. It's disappointing.”
Techau said the task force’s recommendations align with the recommendations they put forth in July. The former state agency directors also criticized the task force for not including the state auditor, which they said is most well-positioned for auditing managed care operations.
