OPINION:
Eliminating “waste, fraud and abuse” is a perennial goal of Beltway politicians, but rarely has someone seemed so serious about it as President Trump.
His crusade with the Department of Government Efficiency is headed by free-thinking savant billionaire Elon Musk, who, in his first few weeks on the job, has taken an ax to wasteful government initiatives that press secretary Karoline Leavitt laid out in an already long list to the media. House Republicans are also working overtime to lower government spending. With the bulk of $880 billion in necessary spending cuts coming from changes to Medicaid to offset some of the costs of Mr. Trump’s agenda, I have identified a place for DOGE and congressional Republicans to clean up liberal fiscal mismanagement without cutting imperative Medicaid programs.
Even though American health care is the most expensive in the world, California makes it more expensive. How does it pay for this? It uses the rest of the country’s tax dollars to subsidize its incompetent bureaucracy and overpromised pensions through manipulated Medicaid federal reimbursements.
Here is how California is doing it.
California’s overarching and bloated government has been able to manipulate its Medicaid federal reimbursements since 2022 by applying for an increase in intergovernmental transfers for public Ground Emergency Medical Transportation services. When this intergovernmental transfer was approved, the price for an ambulance ride was artificially increased by more than $800. Within six months of the increase’s implementation, the Centers for Medicare & Medicaid Services warned states about their fire departments potentially abusing intergovernmental transfers by reporting the inflated cost of an ambulance ride to CMS, subcontracting Ground Emergency Medical Transportation to a private provider for less and pocketing the difference.
One thing California is doing with this extra loot is backfilling the California firefighters’ underfunded pension plans. For years, first responders have traded on their understandable goodwill with the public to negotiate pension plans that California politicians knew were unsustainable. A future generation would have to cash the check California wrote, so it wouldn’t be the state’s problem if it bounced. This Medicaid fraud scheme became a “get out of jail free” card. California fire service representatives estimate that the intergovernmental transfers will generate billions of dollars annually in additional federal tax funding for California fire departments.
If California elected officials think firefighters should earn more than $200,000 annually plus $90,000 in benefits and retire at 55 with 90% of that income, that is their decision. However, it is their problem to solve. With a national debt of more than $34 trillion and a deficit of $1.83 trillion, America cannot afford, nor should it be morally obligated, to pay for California’s disastrous policies.
Medicaid serves an essential purpose, but guardrails must be built into these programs to ensure the funds are used properly.
The DOGE commission should investigate this as soon as possible. To eliminate this unethical practice, it should coordinate with Dr. Mehmet Oz, Mr. Trump’s pick to be CMS administrator. This can likely be done solely with administrative action at CMS. If Congress is needed, the White House and Mr. Trump will help.
Russ Vought, the director of the Office of Management and Budget, probably has thoughts. In any event, DOGE can bring these branches of the Trump administration together to end this practice once and for all before it spreads to other states.
This surely will not be the last area of government spending bloat for DOGE to cut, but it could save American taxpayers billions.
• Ryan Ellis is one of the leading tax experts in the political world. He is the president of the Center for a Free Economy and a senior tax adviser at the Family Business Coalition.
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