May 21 (Reuters) – The U.S. Department of Health and Human Services said on Thursday it has launched a new AI-led initiative to review annual audits to strengthen oversight across federally funded health programs amid concerns around widespread fraud.
The program, called the Audit Enforcement and Risk Oversight initiative, or AERO, will review at least five years of audit records of HHS-funded programs across all 50 states, the department said.
The move comes after the Trump administration in March launched a national anti-fraud task force led by Vice President JD Vance that aims to crack down on healthcare scams.
The administration said earlier this month it will block new home healthcare and hospice providers from enrolling in Medicare for at least the next six months, citing concerns about fraudulent practices.
HHS said hundreds of grantees have not submitted their required audits, with some late by more than two years.
The agency said it will work collaboratively with states and grantees to address audit findings and strengthen internal controls, and may take measures such as temporarily withholding payments, cutting off grants entirely, or withholding future funds from recipients that fail to resolve the issues.
Under federal law, non-federal entities, including states, local governments, nonprofits, and higher education institutions, that spend at least $1 million annually in federal funds are subject to audit requirements.
(Reporting by Padmanabhan Ananthan in Bengaluru; Editing by Shailesh Kuber)
