Could Elon Musk Trigger Changes To Medicare? Experts Weigh In
Written by
Stacy Sare Cohen
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Amber Barkley
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Elon Musk, head of the Department of Government Efficiency (DOGE), aims to save money for the government by investigating Medicare to expose fraud and reduce waste, Newsweek reported. GOBankingRates spoke with a data scientist, finance expert and healthcare administrator about potential changes he could implement.
What Is Musk Hoping To Find?
The Center for Medicare and Medicaid Services (CMS) spent $1.5 trillion on health insurance in 2024 for 68 million retirees and disabled Americans. In addition, Medicaid pays health insurance for approximately 73 million low-income households, contributing to 22% of federal spending, Newsweek reported.
According to the FBI, healthcare fraud can raise health insurance premiums, expose patients to unnecessary medical procedures and increase taxes.
Uncovering Fraud by Hospitals and Nursing Homes
While healthcare fraud takes many forms, from scammers posing as medical professionals to prescription fraud and identity theft, one of the country’s biggest fraud schemes is overbilling by healthcare institutions.
Fraud in hospitals and nursing homes often involves inflated billing and unnecessary treatments, said Christopher L. Stroup, founder and president of Silicon Beach Financial.
Stroup explained the technologies that Musk could deploy to detect fraudulent activity: “AI-driven pattern recognition, blockchain for medical records and IoT [Internet of Things] monitoring could expose these abuses; if Musk-backed tech enters this space, we could see automation reduce fraud, Neuralink tracking real patient responses and decentralized data ownership improving transparency.”
Removing Bureaucratic Inefficiency
Elon Musk’s entry into exploring CMS could be disruptive if he leverages AI, blockchain and automation to automate payments and remove bureaucratic inefficiency, said data scientist and founder of FinlyWealth Kevin Shahnazari.
“AI-powered audit systems could detect billing discrepancies, track fraudulent claims in real-time and increase accountability within the system,” Shahnazari said. “If Musk leverages Tesla’s AI capabilities or SpaceX’s logistical precision, he could compel a fundamental overhaul of healthcare payment processing to make it faster and more transparent.”
What About HIPAA Privacy Laws?
Although Musk could employ AI to optimize fraud detection, this would require enormous amounts of sensitive medical data and invoke HIPAA and patient privacy concerns, according to Shahnazari.
“If Musk suggests a blockchain-based decentralized system to secure patient data while facilitating real-time fraud detection, it would be groundbreaking but controversial; the biggest challenge will be achieving a balance between efficiency and privacy,” he explained.
“With his track record of innovation, Musk could play a pivotal role in reshaping how Medicare operates by incorporating advanced technologies to streamline operations, reduce costs and possibly transform the healthcare system,” said Aja Chavez, national executive director at Mission Prep Healthcare, who navigates Medicare’s complexities and regulations regularly by overseeing his organization’s adherence to essential standards.
Chavez added that any technological transformation must address concerns about HIPAA privacy. “It’s vital to ensure that patient data remains confidential and secure within these systems, and innovations must adhere strictly to privacy laws.”
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