HELP STATES Act
- Sponsor
- Rep. Kean, Thomas H. [R-NJ-7]
- Committees
- Energy and Commerce Committee (primary)
- Last action
- Sep 28, 2026
Bottom line
The bill incentivizes states to combat Medicaid fraud more aggressively by allowing them to keep a larger share of recovered funds, which must then be reinvested into anti-fraud efforts.
What it actually does
This bill amends the Social Security Act to allow states to retain a larger portion of funds recovered from fraudulent Medicaid overpayments. Specifically, states can elect to keep up to 25% of the federal government's pro rata share of these recovered amounts. The retained funds must be reinvested by the states into Medicaid program integrity activities, such as audits, investigations, and technology to detect and prevent fraud.
Proponents argue
Proponents argue that by increasing the financial incentive for states to pursue Medicaid fraud, the bill will lead to a significant increase in overall fraud detection and recovery. They contend that reinvesting these funds directly into program integrity will strengthen anti-fraud infrastructure, ultimately saving taxpayer money and ensuring the long-term solvency of the Medicaid program.
Opponents contend
Opponents might argue that while the intent is good, reducing the federal share of recovered funds could decrease federal revenue without a guaranteed proportional increase in state recovery efforts. They might also raise concerns about the potential for states to prioritize easier-to-recover fraud cases over more complex ones, or that the 25% incentive may not be sufficient to drive substantial new efforts in all states.
The bill is very short and easy to read, allowing ample time for a thorough evaluation of its provisions.
Section 2, amending 42 U.S.C. 1396b(d)(3)
Increasing State Share of Overpayment Recovery
This provision allows states to keep up to an additional 25% of the federal government's share of money recovered from fraudulent Medicaid overpayments. Currently, the federal government is entitled to a pro rata share of these recoveries. The bill permits states to elect to exclude up to 25% of this federal share from the amount that would normally be adjusted, effectively increasing the state's take. These additional state funds must be used exclusively for activities that enhance Medicaid program integrity, such as audits, investigations, data analysis, and investment in fraud detection technology. States are also required to report annually on how these funds are utilized.
Supporters argue
Supporters argue that this provision creates a powerful incentive for states to invest more heavily in identifying and recovering fraudulent Medicaid payments. By allowing states to directly benefit from their anti-fraud successes and requiring reinvestment, the bill ensures a stronger, more efficient, and less wasteful Medicaid program nationwide.
Critics contend
Critics might contend that while the goal of reducing fraud is laudable, this mechanism shifts a portion of the financial burden of fraud recovery from the federal government to the states. They may argue that the reduction in the federal share of recoveries could be a net loss for the federal budget if the increase in overall recoveries is not substantial enough to offset it.
Tradeoffs
The primary tradeoff is between immediate federal revenue from fraud recoveries and the potential for greater long-term savings through enhanced state anti-fraud efforts. While the federal government's share per recovered dollar decreases, the overall volume of recovered dollars could increase, leading to a net positive for both federal and state budgets. However, this relies on states effectively utilizing the additional funds.