Pennie fraud reduction bill moves to Senate
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The Reducing Fraudulent Pennie Claims bill is moving to the state Senate after receiving House approval in June.
Sen. Tracy Pennycuick, R-Red Hill, has introduced Senate Bill 1439 to address improper enrollment, waste and fraud in Pennsylvania's Health Insurance Exchange Authority, nicknamed Pennie. The Reducing Fraudulent Pennie Claims bill enhances fraud identification within Pennie by requiring documentation for enrollment to include proof of residency or documented proof associated with the individual's intent to reside in the commonwealth. Additionally, the legislation will require the establishment of an Office of Fraud Prevention within Pennie to solely focus on identifying and combatting fraud before it takes place.
The measure has bipartisan support and mirrors language adopted by the state House of Representatives on June 9. "Tackling fraud in our health insurance marketplace is critical to protecting consumers and the taxpayers who pay for subsidized healthcare," said Pennycuick. "Strong safeguards are not barriers to access; they are essential protections that ensure benefits are available for eligible Pennsylvanians while preserving the integrity and long-term sustainability of the program."
The state Senate Banking and Insurance Committee revealed that enrollment fraud has been a problem for years, facing both federal and state-based Affordable Care Act exchanges such as Pennie. The committee reported that for insurers offering plans on Pennie, $19.6 million was paid out in fraudulent claims in 2025 alone with $163.6 million in fraudulent claims billed against insurers for 2026.
House Bill 2550,, the House version of the Reducing Fraudulent Pennie Claims bill, passed the House by a 200-2 vote. An amendment introduced by Rep. Josh Bashline, R-Clarion,, would require businesses to take out a policy through Pennie that meets the affordability requirements as determined by the exchange.
Bashline's amendment, which garnered support by a 132-70 vote, addresses concerns related to fraud with Pennie by establishing conditions to maintain compliance.
"In recent months, the Commonwealth and nation have learned about the widespread fraud in places like Minnesota. We must stop fraudsters and thieves from accessing funds that belong to other people," said Bashline. "The government must be held to the highest standard for fiscal stewardship, and my amendment goes a long way in accomplishing that."
While state lawmakers are trying to prevent fraudulent claims, the federal government is placing more resources in the state to prosecute fraud cases as well. Earlier this month, Dr. Mehmet Oz, Centers for Medicare & Medicaid Services administrator, and federal law enforcement announced criminal charges against 19 defendants in Pennsylvania for Medicaid home health care fraud schemes exceeding $4 million. The Justice Department's National Fraud Enforcement Division (Fraud Division) announced a major investment in combatting Medicaid fraud through a significant expansion of the Division's Northeast Health Care Fraud Strike Force to Philadelphia, Pennsylvania, an enforcement initiative uniting the Division's Health Care Fraud Section with the U.S. Attorney's Office for the Eastern District of Pennsylvania.
"Medicaid fraud robs hardworking taxpayers, deprives vulnerable Americans of the care they need, and undermines the public trust that sustains our social safety net," Oz said. "CMS will continue partnering with law enforcement to shut down these scams while establishing new anti-fraud safeguards that flag criminal activity before the money ever leaves the building. This Administration is taking a whole-of-government approach to protecting Medicaid--ensuring the program serves the Americans who depend on it, not criminals seeking to exploit it."