Dr. Oz uncovers shocking Medicaid flaw that is costing US billions, warns people are 'gaming' the system

Trump-appointed Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz is spearheading a surprising shift in how Medicare and Medicaid are managed – one that he says could save the U.S. hundreds of billions of dollars.

Appearing on "Mornings with Maria," the former television host and heart surgeon described what he called a "generational opportunity" to reform Medicaid.

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"I believe we're going to increase expenditures on Medicaid," Dr. Oz said Tuesday at the 2025 Milken Institute Global Conference. "It may not increase as much as it would have normally increased, but I think we have a unique opportunity... because what the president wants to do is get everyone aligned."

Dr. Oz emphasized that the system is currently misallocating funds. He argued that Medicare and Medicaid are paying out the "wrong people" with the wrong amounts of money.

"In Medicaid, we've got a problem. We're not funding the program as it was originally envisioned, because we're shifting so much of it to able-bodied individuals."

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FOX Business host Maria Bartiromo pressed Dr. Oz, asking him to detail how he plans to trim the fat within Medicaid without "touching the muscle."

"There's a lot of systematic waste," Dr. Oz continued. "There's about a billion dollars, at least, that we believe – potentially even up to $10 billion, if we get it right, of people who are on Medicaid in more than one state. Now, why would that happen?"

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"We're here in California now. If you're a Medicaid patient in California and you move to Nevada, who does the federal government compensate? It turns out... Both. Why? Because it's incentivized for both governors not to tell us. They don't build systems to alert us, because it's okay if they get paid extra in that regard. So, as we discover these cracks in the current system, we shut down those areas of waste."

Dr. Oz concluded by saying that the Trump administration will continue to spotlight the points of "waste, fraud and abuse" within the nation's Medicaid programs.

As CMS administrator, Dr. Oz says his mission is to identify and shut down these inefficiencies while preserving care for those truly in need.

"We have tens of billions of waste, fraud and abuse. But if we fix that and make the system more efficient by identifying those problems, we have hundreds of billions of dollars of potential benefit by making the system work better for Americans. I've got to give you a concrete reality," he continued. 

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"As a heart surgeon, let me speak to this, Maria. The most expensive care we give is bad care. Because you pay to do it poorly, then you pay to fix the problem, and then you pay downstream costs that go along with someone not getting the right care at the right time. This is true across the board. If we can improve the value of what we offer to Americans, we're going to get a lot of savings naturally."