Every day brings new revelations about how widespread welfare state fraud runs rampant in blue states like Minnesota and California. Is Texas immune from fraud? Not entirely.
Amid a national debate over waste, fraud, and abuse in federal health and welfare programs, Texas lawmakers heard testimony this week on potential problems in state oversight of taxpayer-funded programs designed to assist the poor.
“We are dealing today with a healthcare epidemic, but not from a disease or virus. We are examining a nationwide epidemic of fraud in healthcare,” said state Sen. Lois Kolkhorst (R-Brenham), chair of the Texas Senate Committee on Health and Human Services.
Kolkhorst presided over a nine-hour hearing in Austin on Wednesday, prompted by Lt. Gov. Dan Patrick’s interim charges and President Donald Trump’s call for greater oversight in state-managed programs.
Although the state’s 8 percent “error” rate in administering the Supplemental Nutrition Assistance Program (SNAP) is lower than many other states, under the One Big Beautiful Bill Act, Texas must reduce that rate to 6 percent or less or else face significant penalties. The state must also reduce the Medicaid eligibility error rate to 3 percent or less.
“New federal laws are now going to make it imperative for Texas to reform some of its eligibility programs and improve its compliance with regulations for Medicaid and especially SNAP,” said Kolkhorst. “For the first time in history, states must now fund part of the SNAP program, and improper payments and errors in that system will cost us hundreds of millions of dollars.”
Witnesses informed the committee of potential oversight problems in Medicaid and other programs.
Kaitlyn Finley of the Foundation for Government Accountability said that Texas’ “reasonable opportunity period” (ROP) gives new Medicaid recipients up to 90 days to prove their immigration status, but that some were continuing to remain on temporary status for as many as 1,800 days without documentation.
“The costs have exploded under this policy,” said Finley. “Texas ROP spending went from $650,000 in 2019 to $13 million in 2023. That’s a 1,900 percent increase.”
Finley also noted that Texas had spent over $1 billion in Fiscal Year 2025 on emergency Medicaid for illegal immigrants. She said the state’s “honor system,” allowing applicants to self-report household members, residency, and income without verification, should be reformed.
Jamie Dudensing, President and CEO of the Texas Association of Health Plans (TAHP), which oversees the state’s Medicaid-managed care organizations and dental managed care groups, noted that implementation of prior authorization standards had reduced abuse of a state-managed orthodontics program and reduced “inappropriate use” by 72 percent.
Dudensing warned, however, that preventing abuse of programs requires constant monitoring and her organization often must work with the Texas Health and Human Services Commission (HHSC) to refine guardrails for various programs.
One area of service not under TAHP or other close scrutiny is the state’s hospice network.
Lisa McNair, President and CEO of Hospice Brazos Valley and treasurer for the Hospice Alliance, presented data on taxpayer-supported hospice providers and warned of “low patient counts, multiple hospices in one building, high ‘live discharge’ rates, excessive billing, and shared staff across multiple companies.”
McNair noted that the number of hospice providers in Texas had increased by 98.5 percent since January 2020 for a total of 1,366 as of March 2026, and that 308 of the newest providers were co-located with at least one and as many as 15 other hospices.
“Data showed 15 hospices located in one building on the Northwest Loop 410 in San Antonio. Two were established in 2019, 13 were established in 2021,” said McNair. “[At] 9896 Bissonnet in Houston, there were six hospices, one foundation, one health care company and three [medical services] companies, all with the same owner.”
McNair also pointed out that although hospice serves terminally ill patients — those diagnosed with six months or less to live — at least seven Texas hospices had a 100 percent “live discharge” rate and another 25 had live discharge rates of greater than 90 percent.
It’s an Easter miracle! The dying have been healed!
This week, the California attorney general filed charges against a Los Angeles hospice care fraud ring reportedly responsible for $267 million in fraud, as part of an ongoing federal and state investigation.
Multiple witnesses offered recommendations for limiting fraud, waste, and abuse, including creating means tests for providers and establishing statewide service provider identification numbers and a state database of those providers.
Finley also suggested counting all income for SNAP households and codifying a “proper definition” for qualified aliens to match that in the One Big Beautiful Bill Act. She also suggested Texas adopt a policy requiring notification to U.S. Immigration and Customs Enforcement when an illegal alien applies for Medicaid, such as that in Louisiana.
Dudensing recommended creating a task force at HHSC with a focus on waste, fraud, and abuse.
California clearly has an order of magnitude or two (or maybe three) more fraud than Texas, and California’s fraud obviously has support at the highest levels of state government because leftwing activists are the ones getting their beaks wet, which clearly isn’t the case in Texas. But as the hearings shows, there’s still plenty of room for improvement…