It Is Coming ...

February 7, 2025 by Karl Denninger

.... DOGE is in the house.

CMS, to be precise.

This is step 1, incidentally, but one that Congress can neither interfere with or prevent. In fact it is the Executives job to pay only valid invoices at valid amounts to valid vendors for valid acts.

Note all those uses of the word valid.

That a voucher was submitted does not make the voucher valid to be paid.

CMS is likely a very fruitful place to find fraud simply because of its size. Roughly $2 trillion a year is currently passing through there so if even 10% of that is bogus that's $200 billion each and every year without touching any of what is supposed to be done and paid for there.

If you just look at the overhead rate for CMS you'd be quite impressed; as entities go they pay for a lot with not a lot of overhead. But this presumes that they're not being ripped off.

Step 2 is found in the proposal that I've put forward for a very long time which goes at cost directly, not at whether someone is robbing the system at the current structure of cost. Those are two different thins but not to be ignored.

Step 2 requires Congressional action for most of it -- but not all. None of the enforcement provisions require Congressional action; indeed, to the contrary the Trump Administration (now that it has a functional DOJ with an actual confirmed director) can go after the 15 USC issues directly and not only does Congress not need to be involved they can't stop it.

Indeed, were Trump and Pam Bondi to start indicting insurance and hospital executives, along with the entire boards of both sets of firms for facial violations of 15 USC Chapter 1 (which are trivially-documented every single day) the only way to keep it all from collapsing immediately would be to implement something very similar to my proposal where everyone pays the same price. 80% of the cost would come out of the entire system in a literal weekend.

But to the point of this discovery and documentation of widespread fraud, if it is found and proved up would provide not only political cover but a direct mandate from the people to Congress to stay out of it and in fact put a real medical reform package in place lest a bunch of Congresspeople lose their jobs in a couple of years as the scope of said scam is about $1.5 trillion in the Federal Government alone per year, every year.

I'm not sold -- yet -- on Trump actually going after the meat of the problem -- which from a budgetary perspective resides almost-entirely in the medical realm.

But perhaps -- jut perhaps -- this time he means it and is headed there.

We'll see.