NORTH STATE JOURNAL: Lawmakers probe Medicaid fraud in NC

The House Select Committee on Oversight and Reform questioned North Carolina Attorney General Jeff Jackson and North Carolina Department of Health and Human Services Secretary Devdutta Sangvai about Medicaid waste, abuse and fraud during a hearing held last Thursday.

The hearing lasted three hours and focused on Medicaid fraud and abuse detection.

Rep. Grant Campbell (R-Cabarrus), a physician, chaired and opened the meeting by highlighting the program’s unsustainable enrollment growth and the state being “dead last” nationally in eligibility verification; less than 1% of renewals required income verification.

Campbell stressed that “rooting out waste, fraud and abuse isn’t just a fiscal issue. It is a moral one.”

North Carolina’s Medicaid program exceeds $36 billion annually, with the state’s share at more than $6 billion. It now covers 3.1 million participants, an increase of 984,000 over pre-pandemic figures — the highest percentage growth (54%) in the country.

Sangvai acknowledged rapid growth between Medicaid expansion and increased enrollment during COVID-19, noting around 5% of beneficiaries fall off during redeterminations, with 67% handled via ex parte (data-driven) renewals and the rest requiring human review. Federal rules heavily influence the process, according to Sangvai.

Campbell presented three example providers with unusually high per-beneficiary billing: Savin Grace 2 ($400,000), Creative Directions ($2.7 million) and Wilson’s Home Care ($12 million).

Campbell said the examples, with questionable expenses and boarded-up facilities, were not accused of fraud but warranted closer scrutiny.

Jackson tried to push back on the examples, saying what Campbell provided wouldn’t be good enough for court use.

“We can disagree on what’s fraud, we can disagree on what’s wasted,” Campbell responded. “But what we cannot agree to do is not look. Can we at least agree that that should get your interest?”

Jackson responded, “Yes.”

Another case highlighted by Campbell involved a Charlotte activist named Cedric Dean, who was raided by the FBI last year and describes himself as a “thugologist” on LinkedIn. Dean allegedly billed more than $15 million in nine months via peer support services using homeless individuals’ IDs. Dean denies the allegations, per WNCN.

“We are looking into how Cedric Dean actually became a credentialed provider,” Sangvai told Campbell.

Both Jackson and Sangvai provided written testimony ahead of the hearing emphasizing collaboration between their offices on the issue.

Sangvai said the North Carolina Department of Health and Human Services (NCDHHS) received around 2,400 complaints in 2025, with 1,867 coming from managed care organizations. Those complaints converted to 114 (10%) investigations and 126 referrals to the attorney general’s office.

Other metrics listed by Sangvai included investigations into 114,454 enrolled Medicaid providers and 228 credible provider allegations. Additionally, he said there were 158 credible member fraud allegations, adding 64 allegations were reported this year through Feb. 25.

Jackson’s testimony discussed the Medicaid Investigations Division (MID), which he defended by saying it ranks fourth nationally in recoveries per federal dollar and described MID as “big-game hunters” targeting large cases.

“There is no acceptable level of fraud in North Carolina,” Jackson said in his testimony. “We must fight it aggressively, everywhere.”

He said $296 million was recovered between 2019 and 2025, a recovery rate he said is the eighth highest nationally. He also said $1.222 billion had been recovered since 1979.

The federal Medicaid program law was signed by President Lyndon B. Johnson on July 30, 1965. North Carolina’s Medicaid program began operations Jan. 1, 1970. The state’s Medicaid expansion began Dec. 1, 2023.

Jackson repeatedly underscored the need for a dedicated data-mining specialist to dig into fraud cases.

“This is clearly the future,” he said. “We are asking you in this session for one full-time data mining specialist.”

The committee expressed concern that lax verification and a “bias toward finding people eligible” leave the program vulnerable to improper enrollment. Rep. Jeff McNeely (R-Iredell) asked Sangvai if it was true more than 10% of noncitizens were on the state’s Medicaid benefits.

“If only given the option for two answers, the answer is false,” Sangvai said.

McNeely then asked, “How many non-U.S. citizens are receiving Medicaid in North Carolina, and what’s it costing the citizens of North Carolina?”

Sangvai did not answer the question, instead describing the audit process for enrollees, and said strong audit scores indicated improper eligibility is “exceedingly low.” When pressed on whether any non-U.S. citizens are receiving benefits, Sangvai replied, “To my knowledge, no.”

Rep. Charles Miller (R-Brunswick) focused on the source of fraud tips, asking Jackson if he knew the percentages of “regular people calling in tips versus referrals generated by DHHS’s own fraud detection work.”

“I don’t know the exact percentage, but I do know that, as a category, the biggest category of tips that we get is from private citizens,” Jackson said. “But that conflates two different groups of private citizens. One is members of the general public — we get lots of those — but the other is whistleblowers.”

Miller said data showed public tips dominated referrals. In 2025, private citizens made up 223 of the 345 referrals (65%) made to Jackson’s office. He also said NCDHHS’s “own proactive detection work” generated 22 referrals (6%).

“The public is doing 10 times more fraud detection than the state agency responsible for the program,” Miller said. “Does that concern you?”

“Well, I don’t think that’s an accurate statement,” said Jackson. “I think it is the case that we have a link on a website that is public facing, so it gets a lot of traffic.”

Rep. Timothy Reeder (R-Pitt) briefly brought up NCDHHS’ 2025 Medicaid reimbursement rate cuts used by Gov. Josh Stein to pressure the General Assembly over Medicaid rebase funding and passing a budget.

Reeder asked Sangvai if he still thought the program would run out of money. Sangvai responded, “In the absence of an appropriation, we will run out of money.”

Reeder pressed for a date. Sangvai replied, “Right now, the forecast is in May.”