FRAUD Act of 2025
The FRAUD Act of 2025 requires the Department of Veterans Affairs (VA) to implement a dedicated information technology system to detect fraud, waste, and abuse in claims submitted under the Veterans Community Care Program (VCCP). The system must continuously monitor claims, use historical and real-time data to predict and identify fraudulent or overpaid claims, and include ready-made analytic models and machine-learning features to reduce false positives and adapt to new fraud schemes. It must integrate with existing VA claims processing systems, provide logging and reporting on detected fraud, and perform post-payment analyses to curb unnecessary costs. Funding for this system would come from the VA Franchise Fund, and the Secretary must annually report to Congress on the system’s effectiveness, estimated savings, and planned enhancements for seven years. The measure also provides a sunset after seven years and requires implementation within one year of enactment.
Key Points
- 1Scope and purpose: Directs VA to use a dedicated information technology system to analyze and detect fraud, waste, and abuse in claims under the Veterans Community Care Program, including claims processed through a health care claims enterprise solution for providers outside the Community Care Network.
- 2System features: Requires continuous claim monitoring, data analysis (historical and real-time), ready-made analytic models, post-payment analysis, system integration with VA’s existing processing tools, comprehensive logging and reporting, machine-learning to improve detection and reduce false positives, and ongoing updates to catch new fraud patterns. Also allows any other functions the Secretary deems necessary.
- 3Funding: The system must be funded through the VA Franchise Fund, a dedicated VA funding mechanism.
- 4Reporting to Congress: Mandates annual reports to the Senate and House Veterans’ Affairs Committees for seven years, covering system effectiveness, estimated savings, and plans to enhance or modify capabilities.
- 5Sunset and implementation: The provisions are set to cease after seven years from enactment unless otherwise extended, with a required implementation date not later than one year after enactment.