Health and Human Services Secretary Robert F. Kennedy Jr. has revealed that Medicare spending on high-priced skin graft wound-care products exploded from about $200 million in 2019 to $14 billion last year, a spike he bluntly characterized as systemic fraud driven by perverse financial incentives inside the medical system.
According to The Post Millennial, Kennedy told Vice President JD Vance at the 2026 MAHA Summit that medical professionals were effectively rewarded for choosing the most expensive options, turning a program meant to protect seniors into a lucrative cash stream for insiders. The doctors who prescribed them would get six percent of the sales cost. And so, they were incentivized to prescribe more expensive products, Sec. Kennedy said, describing a scheme that would be unthinkable in a genuinely accountable, limited-government framework.
Kennedy contrasted American spending with European systems, noting that while European Medicare prices for comparable products remained around 35 cents, U.S. costs soared from $135 to $2,000 per cubic inch. So 2019, we were paying $200 million. Last year, we spend $14 billion, said Kennedy.
He did not mince words about what that meant for taxpayers and seniors. All stolen. It's all stolen. And we were on track to spend $23 billion this year. We put an end to it, and now we have driven that cost down to somewhere around a billion dollars.
The New York Times reported that Medicare paid nearly $15 billion for skin substitutes in 2025, up from under $1 billion in 2019, with some products topping $21,000 per treatment. A recent House Oversight roundtable similarly documented growth from $200 million to $14.4 billion over the same period, underscoring how quickly a federal entitlement can be captured by special interests when oversight collapses.
These costly grafts are intended for chronic wounds, yet investigations found they were repeatedly and unnecessarily applied to elderly patients, including those in hospice care. Individual patients generated millions of dollars in claims shortly before their deaths, according to reports, and multiple criminal cases have already emerged from the scandal.
In 2025, wound-graft company owners Alexandra Gehrke and Jeffrey King received prison sentences of 15.5 and 14 years after pleading guilty to a $1.2 billion false-claims scheme, much of it billed to Medicare. By June 2026, as part of the White House Fraud Task Force, the Justice Department had charged 455 defendants in health care fraud schemes totaling more than $6.5 billion, a reminder that without rigorous enforcement and market discipline, massive federal programs become easy targets for abuse at the expense of American taxpayers and vulnerable seniors.
Login