HHS delays $867.5 million in California Medicaid payments after fraud review
WASHINGTON —
On Tuesday, the U.S. Department of Health and Human Services and the Centers for Medicare & Medicaid Services delayed more than $1 billion in federal Medicaid payments to California and Minnesota while the states provide additional documentation for certain high-risk claims.
Federal officials said the move is part of an effort to prevent fraud, waste, and abuse in Medicaid and protect taxpayer dollars.
“Medicaid exists to serve vulnerable Americans — not to bankroll unsupported claims,” said HHS Secretary Robert F. Kennedy Jr. “Under President Trump’s leadership, we are restoring accountability across our public programs and protecting taxpayer dollars. I appreciate CMS Administrator Dr. Oz’s leadership in strengthening Medicaid program integrity and ensuring federal funds are spent as Congress intended. States that receive federal Medicaid funding must demonstrate that every dollar meets federal requirements. When they cannot, we will not release federal funds until they do.”
CMS is deferring about $867.5 million in federal Medicaid payments to California and about $199 million to Minnesota after financial reviews identified claims that required further review before matching and release of the funds. Officials said these are payment deferrals, not funding cuts, and both states are being given the opportunity to provide documentation showing the claims meet federal Medicaid requirements.
“CMS is done trying to chase down stolen and misused funds after they’ve already left the building,” said CMS Administrator Dr. Mehmet Oz. “That’s why we’re deferring payments related to certain high-risk services within the Medicaid programs in California and Minnesota as part of our proactive new approach to program integrity. By stopping waste and fraud before the check clears, CMS is delivering record-high savings for taxpayers and ensuring that their hard-earned dollars reach the vulnerable Americans Medicaid is meant to serve.”
CMS reviewed California’s claims for certain in-home care programs after identifying spending growth that far exceeded national trends, along with other claims requiring additional documentation.
As a result, the agency is deferring about $867.5 million in federal Medicaid payments until the state provides the information needed to support those claims.
Representative Jimmy Panetta gave the following statement to KSBW 8:
“The Administration is blocking $867 million in Medicaid payments owed to California, bringing the total withheld from our state to more than $2 billion. These types of partisan and punitive decisions against California continue to use funding for healthcare as political leverage while leaving our local hospitals, doctors, and patients to bear the consequences.
“As a former prosecutor, I believe credible allegations of fraud must be thoroughly investigated and anyone responsible must be held accountable. But vague and targeted allegations do not justify the imposition of sweeping penalties that threaten healthcare for millions of Californians.
“The President needs to stop playing politics with our healthcare and start caring about the many issues that are affecting our lives and livelihoods.”