The U.S. spends upwards of $600 billion each year on wasteful healthcare, and as the biggest hospital payor in the country, the federal government has an interest in minimizing this waste. For almost 20 years, the Centers for Medicare and Medicaid Services (CMS) has been developing various auditing capabilities. When the recovery audit contractor program was made permanent in August 2009, it became just the latest example of the War on Waste that has been developing for many years and has now reached maturity. What can physician executives do to arm themselves for the War on Waste? Scientifically based guidelines and documentation of best practices will play an important role and can help ensure more efficient and quality care even as the War on Waste challenges the way hospitals provide care.