Hawaii stood to lose about $3 million in annual federal funding for its Medicaid Fraud Control Unit after the Trump administration denied the unit federal certification, according to a letter sent Thursday by the U.S. Department of Health and Human Services inspector general.
In the letter to Hawaii Attorney General Anne Lopez, Inspector General March Bell said the unit had no criminal indictments or convictions for Medicaid fraud or patient abuse and neglect from 2022 to 2025. Bell wrote that without a federally certified unit, the state’s broader Medicaid funding could be at risk.
After the announcement, Hawaii’s Department of the Attorney General said it would ask the U.S. Department of Health and Human Services to reconsider the decision. In a news release, the office said it “remains committed to protecting Medicaid beneficiaries, safeguarding public funds, and holding accountable those who commit fraud, abuse, or neglect.”
“We recognize the seriousness of the HHS’s concerns and are treating this matter with the urgency it deserves,” the department said. “The Department has mobilized additional personnel and resources from across multiple divisions to conduct a comprehensive review of the findings, prepare a formal response, and pursue all available avenues to preserve and strengthen Hawaii’s Medicaid fraud enforcement efforts. We intend to seek reconsideration of HHS’s decision and will continue working closely with our federal partners to address concerns and demonstrate the full scope of the Medicaid Fraud Control Unit’s work.”
Gov. Josh Green’s office said after discussions with the Centers for Medicare & Medicaid Services that Hawaii’s Medicaid program “remains in good standing and that this action does not affect eligibility, benefits, provider payments, or federal Medicaid funding.”
Department of Human Services Director Joseph Campos II said, “The Medicaid program provides essential healthcare coverage to hundreds of thousands of Hawaii residents and we want our members, providers and community partners to know that their benefits and services will continue without interruption.”
Green also authorized creation of an independent Medicaid Fraud Strike Force within the Department of Human Services, which his office said will support Hawaii’s existing fraud unit.
More than 360,000 Hawaii residents are enrolled in Medicaid. Hawaii received $2.2 billion in federal Medicaid funds in 2024, according to the agency that advises Congress on healthcare spending.
Lopez has disputed the administration’s characterization, saying Hawaii recovered $14 million in civil cases since 2021. The state also charged two people with criminal health care fraud earlier this year.