Oversight of the state’s Medicaid program is well equipped to protect against fraud, and safeguards are in place to detect and prevent waste and abuse, state officials told North Carolina lawmakers at a hearing on Thursday.
The message comes amid a standoff over funding for the program, which provides healthcare to 3 million low-income and disabled North Carolinians. Democratic Gov. Josh Stein says lawmakers need to approve more funding for the program to survive. Lawmakers say the program needs to be managed better.
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North Carolina Attorney General Jeff Jackson and the state’s top health official, Dev Sangvai, testified under oath Thursday to a legislative oversight committee on the state’s efforts to uncover and prosecute Medicaid fraud.
The committee is led by Republican lawmakers. Jackson is a Democrat. And Sangvai, the head of the N.C. Department of Health and Human Services, is a top advisor to Stein.
During Thursday’s hearing each side cited different statistics that they claimed back up their opposing assertions about fraud and fraud prevention.
Jackson said North Carolina ranks among the best nationally in terms of the total amount of money clawed back from fraudulent doctors and other providers, and when compared to the size of his staff running those investigations. Written testimony released ahead of the hearing cited state and federal data.
Jackson noted that he’s asking lawmakers for an extra staff member in the upcoming budget to bolster those investigations.
“We are completely aligned on this: There is no acceptable level of fraud in North Carolina,” Jackson wrote to the committee ahead of Thursday’s hearing. “We must fight it aggressively, everywhere.”
During his testimony Thursday he added: “There is no question that North Carolina is punching way above its weight. We are nationally regarded as one of the finest and most effective Medicaid Fraud Investigation divisions in the country. Our leader Eddie Kirby, who's here with me, has done exclusively this work for 15 years.”
During the hearing, Rep. Mike Schiezelt, R-Wake, questioned the effectiveness of state investigators, alleging that North Carolina has collected only a tiny fraction of the money courts have ordered fraudsters to repay.
Jackson acknowledged that the state sometimes struggles to collect on repayments. He said that’s in part because it’s winning criminal cases, rather than just civil cases, and sending the fraudsters to prison — making it harder to collect the money. Schietzelt, however, countered that other states have found more success winning criminal convictions for Medicaid fraud than North Carolina.
How to catch fraud
Rep. Grant Campbell, R-Cabarrus, said that while his fellow Republicans and the Democratic officials they questioned Thursday won’t agree on everything, he’d like to believe they’re taking the legislature’s concerns seriously.
“Can we at least all agree that there's much more that we can do, to ensure this money is being used appropriately?” Campbell asked.
Jackson agreed and pointed to North Carolina’s work with new data-mining technology. Only a few other states have begun using it to catch Medicaid fraud, he said, but he believes it’s the way of the future. The state can use computer programs to analyze massive troves of data, and identify issues at a granular level — such as whether certain providers are charging more than others for specific billing codes, which could be an indication of fraud.
Campbell had cited a case in which a health care provider claimed a professional credential in “thugology” and another case in which a clinic had suspiciously boarded up windows, asking whether Jackson and Sangvai were bothered by those examples, and whether it might indicate fraud. Jackson told him none of that is evidence that would hold up in court.
The data-mining project he wants lawmakers to provide extra funding for produces actual evidence, he said.
“None of that would survive a grand jury,” Jackson told Campbell. “I'm not telling you that you can't get a conviction based on that. You can't get a charge. I'm telling you how we can get charges. The way we can get charges is by investing in data-mining, so that I can show a grand jury telltale signs of up-coding and phantom billing.”
NC’s Medicaid struggles
North Carolina’s Medicaid program is projected to run out of money this year unless state lawmakers pass a new budget for the current fiscal year, which is nearly over.
Sangvai says funding will run out next month. The legislature is scheduled to return to session on Tuesday. If the program runs out of money, it could mean that all 3 million North Carolinians on Medicaid would be unable to get coverage for medical treatment.
The issues stem from the lack of a new state budget. North Carolina doesn’t enter a government shutdown when there’s no new budget; it simply keeps operating on the old budget. That means Medicaid in 2026 is still running on a budget from 2024. In the meantime North Carolina has been among the fastest-growing states in the nation, and inflation has continued to rise. Both factors have driven up the cost of Medicaid.
But some lawmakers believe population growth and inflation aren’t the only factors to blame. They raised concerns Thursday that the Stein administration’s DHHS isn’t doing enough to catch or prevent fraud in the Medicaid system, and that Jackson’s office isn’t doing enough to prosecute fraudsters.
The state’s fraud-fighting efforts are partially funded by the federal government, and Jackson said that for every $1 his office receives in federal assistance, it wins back $6.28 from fraudsters — making it one of the highest recovery rates in the country, Jackson says.
Stein has said the program will soon run out of money unless state lawmakers give it an additional $319 million. That’s part of a $1.4 billion spending proposal he laid out last month, in advance of the legislature returning to session next week.
Republican state lawmakers — reluctant to continue funneling more and more money into the program, particularly as state revenues are expected to soon begin shrinking for the first time in years — have criticized the state’s administration of Medicaid in recent years under Stein and former Democratic Gov. Roy Cooper.
House Speaker Destin Hall told WRAL in a wide-ranging interview last month he expected the legislature would “provide some additional funding” for Medicaid in the upcoming session, but he indicated that lawmakers are going to want to see more out of DHHS in combatting fraud. He also expressed skepticism that the state is doing as much as it can to find and expel ineligible people from the Medicaid rolls.
“We've got to also provide some oversight,” Hall said. “The Medicaid costs in this state are out of control. We've seen some other states where massive fraud has gone on. North Carolina has a 99% renewal rate for folks on Medicaid. It's basically impossible to get off Medicaid in this state.”
Campbell also raised concerns Thursday with the small number of people who get kicked off Medicaid, saying he believes DHHS has “little to no oversight for confirmation of [income] eligibility.”
Checking eligibility
Sangvai said that during the Covid-19 pandemic, the federal government ordered states to stop looking into Medicaid recipients’ eligibility, to avoid kicking people off their health care during that period. But now he said the state has gone back to checking eligibility, and that in general around 5% of Medicaid recipients are kicked out of the program every year due to their income rising, or otherwise becoming ineligible.
He added that the main work on that happens not in state government, but at the county level. And the same county officials in charge of running those numbers, he said, are also in charge of handling child abuse investigations and other important work. “I don't have to remind anyone that the counties are facing some of the same challenges we are, in terms of labor, workforce, demand on time,” Sangvai said.
In multiple legislative oversight hearings this year, other GOP lawmakers have alleged that health care providers — particularly in the autism field — are billing Medicaid for fraudulent services or amounts, and that the state isn’t catching the fraud.
Sangvai has pushed back against such claims in those previous meetings, and he did so again Thursday.
In 2025 the state received 386 credible allegations of Medicaid fraud and investigated every single one, and there have been dozens more investigations launched so far in 2026, he said in written comments submitted ahead of Thursday’s hearing. Sangvai added that 91 cases are currently under investigation by Jackson’s office for civil or criminal penalties, and another 22 are still being reviewed for possible action.
“These figures represent a significant increase compared to prior years, when the average number of providers referred for investigation was substantially lower,” Sangvai wrote to lawmakers. “This increase is not indicative of a weakening system, but rather enhanced oversight and improved analytics have strengthened our ability to identify and act on potential fraud.”
Sangvai added in his written testimony that the state’s Medicaid program complies with federal and state laws requiring investigations of fraud allegations.
“Every safeguard we put in place ensures resources are going toward quality health care for the people who depend on it,” he said in his written testimony.