In 2014, the U.S. spent approximately $3 trillion on health care. Medicare accounted for $554 billion of these costs and around $60 billion were squandered due to incorrect billing methods, abuse, and fraud. Types of fraud included: kickbacks, up coding, and organized fraudulent crimes. To reduce the financial burden associated with these activities, the U.S. has created various fraud prevention programs. The purpose of this study was to identify methods of Medicare fraud, examine the various programs implemented by the U.S. government to combat fraud and abuse, and determine the effectiveness of these programs. While fraud prevention strategies have proven to be effective, the furtherance of these strategies is imperative in order to continually combat rising healthcare expenditures in the U.S. Benefits of increased fraud prevention and detection are discussed in detail.