Texas lawmakers heard nearly nine hours of testimony Wednesday on fraud, waste, and abuse in the state’s taxpayer-funded health and welfare programs — a hearing that revealed staggering figures on improper spending and put a spotlight on systemic oversight failures across multiple programs.
State Sen. Lois Kolkhorst, chairwoman of the Texas Senate Committee on Health and Human Services, presided over the hearing in Austin, prompted by Lt. Gov. Dan Patrick’s interim charges and President Donald Trump’s call for greater state-level oversight of federally funded programs.
“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,” Kolkhorst said.
The hearing comes as Texas faces new federal compliance requirements under the One Big Beautiful Bill Act. The state’s current 8 percent error rate in administering SNAP must be reduced to 6 percent or less, and the Medicaid eligibility error rate must fall to 3 percent or below — or Texas will face significant financial penalties.
“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,” Kolkhorst said. “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.”
Among the most striking figures presented: Texas spent over $1 billion in Fiscal Year 2025 on emergency Medicaid for illegal immigrants. Kaitlyn Finley of the Foundation for Government Accountability told the committee that the state’s “reasonable opportunity period” — which gives new Medicaid recipients up to 90 days to prove immigration status — had in some cases stretched to 1,800 days without documentation.
“The costs have exploded under this policy,” Finley said. “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 currently operates on an “honor system” allowing applicants to self-report household members, residency, and income without verification — a practice she recommended reforming. She also suggested Texas adopt a policy similar to Louisiana’s, which requires notification to U.S. Immigration and Customs Enforcement when an illegal immigrant applies for Medicaid.
Witnesses also flagged serious concerns about the state’s hospice industry. Lisa McNair, President and CEO of Hospice Brazos Valley, told the committee that the number of hospice providers in Texas had increased by 98.5 percent since January 2020, reaching 1,366 as of March 2026. Of those, 308 newly established providers were co-located with at least one and as many as 15 other hospices at the same address.
“Data showed 15 hospices located in one building on the Northwest Loop 410 in San Antonio,” McNair said. “Two were established in 2019, 13 were established in 2021.”
McNair further noted that at least seven Texas hospices reported a 100 percent “live discharge” rate — meaning no patients died under their care despite hospice being designated for those with six months or less to live — and another 25 reported live discharge rates above 90 percent.
Jamie Dudensing, President and CEO of the Texas Association of Health Plans, recommended the Legislature establish a task force at the Texas Health and Human Services Commission focused specifically on waste, fraud, and abuse — noting that previous legislative task forces had focused almost exclusively on expanding access rather than reviewing program integrity.
State Sen. Charles Perry suggested solutions could include greater use of technology, including artificial intelligence, noting that state agencies currently often rely on a single employee tracking data on a spreadsheet.
State Sen. Molly Cook, the lone Democratic voice of dissent, argued that since Texas already has some of the lowest error rates in the country, lawmakers should instead focus on corporate health insurance practices and pharmaceutical pricing.
“Medicaid in Texas serves pretty much exclusively new moms, children, and people living with unbelievably severe disabilities,” Cook said. “I’m really concerned about how policies like prepayment holds and indiscriminate surveillance would target our workforce for this vulnerable population.”
