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Centers for Medicare & Medicaid Services administrator Dr. Mehmet Oz speaks before Vice President JD Vance at the Wisconsin Air National Guard facility at Milwaukee Mitchell International Airport, Wednesday, July 8, 2026, in Milwaukee. (AP Photo\/Mark Schiefelbein, Pool) <\/p>\n
The Trump administration on Tuesday said it was deferring more than $1 billion in Medicaid payments to Minnesota and California because of \u201csuspected fraud and noncompliance,\u201d the latest in a series of punitive steps it has linked to allegations of fraud in mostly Democratic-led states.<\/p>\n
Health Secretary Robert F. Kennedy Jr. said the new actions \u2014 which come after previously announced Medicaid funding deferrals in those states \u2014 are part of the administration\u2019s strategy to \u201cstop the fraud before it happens\u201d rather than claw back problematic spending after bad actors are prosecuted, as previous administrations had done.<\/p>\n
\u201cWe have a duty to stop the payments, demand answers and then follow the evidence wherever it leads,\u201d Kennedy told a news conference.<\/p>\n
The tactic is part of the administration\u2019s sweeping campaign to show it\u2019s cracking down on fraud and saving taxpayers money when rising healthcare costs and other economic stressors have made affordability a top voter concern in November\u2019s midterm elections.<\/p>\n
In March, Vice President JD Vance launched a new anti-fraud task force at the request of President Donald Trump, bringing together officials from various departments to use data and technology to identify and investigate suspected wrongful use of federal dollars.<\/p>\n
But the federal government hasn\u2019t provided \u201cdata or explanation on how the deferral amount was calculated or what it was based on\u201d to Minnesota, said John Connolly, the temporary commissioner and state Medicaid director for Minnesota\u2019s Department of Human Services.<\/p>\n
\u201cToday\u2019s actions show that the federal government is acting again in unprecedented and punitive ways as part of their war on Medicaid and its recipients,\u201d he said in a statement. \u201cPartnership \u2014 not politics \u2014 is required to stop criminals and protect services for the people who need them.\u201d<\/p>\n
Minnesota\u2019s Democratic Gov. Tim Walz suggested the Republican administration was deferring the funds to pay for Trump\u2019s tax cuts to wealthy Americans. California\u2019s Democratic Gov. Gavin Newsom accused the administration of targeting it for political reasons.<\/p>\n
The Trump administration intensified anti-immigration efforts in Minnesota earlier this year, sending in a robust force of Immigration and Customs Enforcement officers whose actions there caused weeks of counterprotests and included the shooting deaths of two civilians. Trump himself has frequently denounced California as a badly governed state.<\/p>\n
States are facing obstacles because of the actions<\/p>\n
The strategy has led to some false starts and headaches for states.<\/p>\n
In April, for example, the Centers for Medicare & Medicaid Services acknowledged to The Associated Press it made a significant error in figures it used to help justify a fraud probe in New York. Last month, California\u2019s Medicaid director told a congressional committee that CMS had not yet provided \u201cany instances of fraud, waste or abuse\u201d to the state in its justification of a $1.3 billion Medicaid funding deferral announced in May.<\/p>\n
And in Minnesota, state officials have been executing a thorough corrective action plan to defray CMS concerns that have led the agency to defer some $260 million in federal money and to threaten future cuts.<\/p>\n
\u201cWe have cooperated in good faith and proactively engaged the Centers for Medicare and Medicaid Services to first raise the alarm on fraud in Minnesota\u2019s Medicaid program, to effectively investigate fraud and to institute further safeguards against future misuse of funds,\u201d Connolly said.<\/p>\n
Kennedy didn\u2019t specify in Tuesday\u2019s announcement whether the new deferrals \u2014 $867.5 million in federal Medicaid payments to California and $199 million to Minnesota \u2014 are in addition to, or overlap with, earlier deferrals announced this year.<\/p>\n
CMS Administrator Dr. Mehmet Oz didn\u2019t provide concrete examples of fraud in the two states in justifying the deferrals. He did mention some patterns the agency noticed that it found questionable, including that some providers were billing for four or more patients at the same time, or billing after the date of a Medicaid beneficiary\u2019s death.<\/p>\n
Oz also highlighted a fast rate of growth in California\u2019s home care program as a reason for concern. California officials have disputed that idea, explaining that the state\u2019s home care program has grown because of an intentional strategy to keep people out of more expensive nursing homes.<\/p>\n
\u201cIn-home care growth reflects intentional, federally encouraged expansion, not improper spending,\u201d said Anthony Cava, spokesperson for the California Department of Health Care Services. \u201cCalifornia is calling on CMS to stop threatening care for California\u2019s most vulnerable residents.\u201d<\/p>\n
Flow of money could be restored \u2014 with documentation<\/p>\n
Kennedy and Oz said states could restart the flow of federal funding by providing documentation proving the payments in question were legitimate.<\/p>\n
Officials in both states have previously acknowledged they are working with the federal government to provide the requested information. Oz said Minnesota had already returned documents to the federal government and they were being \u201creevaluated very carefully.\u201d<\/p>\n
Kennedy also suggested Tuesday that he would extend the power to exclude providers from Medicaid, Medicare and other federal health programs to CMS. In the past, that authority has rested solely with his department\u2019s Office of the Inspector General.<\/p>\n
\u201cThis is going to be a full force multiplier,\u201d HHS Inspector General Thomas March Bell told a news conference. \u201cIt\u2019s going to create additional momentum, and it\u2019s going to exclude additional bad actors.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Centers for Medicare & Medicaid Services administrator Dr. Mehmet Oz speaks before Vice President JD Vance at the…\n","protected":false},"author":2,"featured_media":407375,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[7,9,8],"class_list":["post-407374","post","type-post","status-publish","format-standard","has-post-thumbnail","category-california","tag-california","tag-california-headlines","tag-california-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/407374","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=407374"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/407374\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/407375"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=407374"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=407374"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=407374"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}