{"id":137067,"date":"2025-09-06T12:39:07","date_gmt":"2025-09-06T12:39:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/137067\/"},"modified":"2025-09-06T12:39:07","modified_gmt":"2025-09-06T12:39:07","slug":"california-overbilled-medicaid-500-million-to-provide-care-for-undocumented-immigrants-and-now-trump-is-cracking-down","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/137067\/","title":{"rendered":"California overbilled Medicaid $500 million to provide care for undocumented immigrants \u2014 and now Trump is cracking down"},"content":{"rendered":"

The Trump administration is taking its\u00a0immigration crackdown<\/a>\u00a0to the\u00a0health care safety net,<\/a>\u00a0launching Medicaid spending probes in at least six Democratic-led states that provide comprehensive health coverage to poor and disabled immigrants living in the U.S. without permanent legal status.<\/p>\n

The Centers for Medicare and Medicaid Services is scouring payments covering health care for immigrants without legal status to ensure there isn\u2019t any waste, fraud or abuse, according to public records obtained by KFF Health News and The Associated Press. While acknowledging that states can bill the federal government for Medicaid emergency and pregnancy care for immigrants without legal status, federal officials have sent letters notifying state health agencies in California, Colorado, Illinois, Minnesota, Oregon and Washington that they are reviewing federal and state payments for medical services, such as prescription drugs and specialty care.<\/p>\n

The federal agency told the states it is reviewing claims as part of its commitment to maintain Medicaid\u2019s fiscal integrity. California is the biggest target after the state self-reported overcharging the federal government for health care services delivered to immigrants without legal status, determined to be\u00a0at least $500 million<\/a>, spurring the threat of a lawsuit.<\/p>\n

\u201cIf CMS determines that California is using federal money to pay for or subsidize healthcare for individuals without a satisfactory immigration status for which federal funding is prohibited by law,\u201d according to a letter dated March 18, \u201cCMS will diligently pursue all available enforcement strategies, including, consistent with applicable law, reductions in federal financial participation and possible referrals to the Attorney General of the United States for possible lawsuit against California.\u201d<\/p>\n

The investigations come as the White House and a Republican-controlled Congress slashed taxpayer spending on immigrant health care\u00a0through cuts<\/a>\u00a0in President Donald Trump\u2019s spending-and-tax law passed this summer. The administration is also\u00a0pushing people<\/a>\u00a0living in the U.S. illegally off Medicaid rolls. Health policy experts say these moves could hamper care and leave safety net hospitals, clinics and other providers\u00a0financially vulnerable<\/a>. Some Democratic-led states \u2014\u00a0California, Illinois and Minnesota<\/a>\u00a0\u2014 have already had to end or slim down their Medicaid programs for immigrants due to ballooning costs. Colorado is also considering cuts due to cost overruns.<\/p>\n

At the same time, 20 states are pushing back on Trump\u2019s immigration crackdown\u00a0by suing<\/a>\u00a0the administration for\u00a0handing over Medicaid data<\/a>\u00a0on millions of enrollees to deportation officials. A federal judge\u00a0temporarily halted<\/a>\u00a0the move. California\u2019s attorney general, Rob Bonta, who led that challenge, says the Trump administration is launching a political attack on states that embrace immigrants in Medicaid programs.<\/p>\n

\u201cThe whole idea that there\u2019s waste, fraud and abuse is contrived,\u201d Bonta said. \u201cIt\u2019s manufactured. It\u2019s invented. It\u2019s a catchall phrase that they use to justify their predetermined anti-immigrant agenda.\u201d<\/p>\n

Trump administration targets immigrants<\/p>\n

Immigrants lacking permanent legal status are not eligible to enroll in comprehensive Medicaid coverage. However, states bill the federal government for emergency and pregnancy care provided to anyone.<\/p>\n

Fourteen states and Washington, D.C.<\/a>, expanded their Medicaid programs with their own funds to cover low-income children without legal status. Seven of those states, plus Washington, D.C., have also provided full-scope coverage to some adult immigrants living in the country illegally.<\/p>\n

The Trump administration appears to be targeting only states with full Medicaid coverage for both kids and adults without legal status. Utah, Massachusetts and Connecticut, which provide Medicaid coverage\u00a0only to immigrant children<\/a>, have not received letters, for instance. CMS declined to provide a full list of states it is targeting.<\/p>\n

Federal officials say it is their legal right and responsibility to scrutinize states for misspending on immigrant health coverage and are taking \u201cdecisive action to stop that.\u201d<\/p>\n

\u201cIt is a matter of national concern that some states have pushed the boundaries of Medicaid law to offer extensive benefits to individuals unlawfully present in the United States,\u201d CMS spokesperson Catherine Howden said about the agency\u2019s probe of selected states. The oversight is intended to \u201censure federal funds are reserved for legally eligible individuals, not for political experiments that violate the law,\u201d she said.<\/p>\n

Health policy researchers and economists say providing Medicaid coverage to immigrants for preventive services and treatment of chronic health conditions staves off more costly care for patients down the road. It also tamps down insurance premium increases and the amount of uncompensated care for hospitals and clinics.<\/p>\n

Francisco Silva, president and CEO of the\u00a0California Primary Care Association<\/a>, said the Trump administration is threatening to drive up health care costs and make it more difficult to access care.<\/p>\n

\u201cThe impact is emergency rooms would get so crowded that ambulances have to be diverted away and people in a real emergency can\u2019t get into the hospital, and public health threats like disease outbreaks,\u201d Silva said.<\/p>\n

California has taken a\u00a0health-care-for-all<\/a>\u00a0approach, providing coverage to 1.6 million immigrants without legal status. The expansion, which was rolled out from 2016 to 2024, is estimated to cost $12.4 billion this year. Of that, $1.3 billion is paid by the federal government for emergency and pregnancy-related care.<\/p>\n

As California rolled out its expansion, the state erroneously billed the federal government for care provided to immigrants without legal status \u2014 details that have not previously been reported and that former state officials shared with KFF Health News and the AP. The state improperly billed for services such as mental health and addiction services, prescription drugs and dental care.<\/p>\n

Jacey Cooper, who served as California\u2019s Medicaid director from 2020 to 2023, said she discovered the error and reported it to federal regulators. Cooper said the state had been working to pay back at least $500 million identified by the federal government.<\/p>\n

\u201cOnce I identified the problem, I thought it was really important to report it and we did,\u201d Cooper said. \u201cWe take waste, fraud and abuse very seriously.\u201d<\/p>\n

It\u2019s not clear whether that money has been repaid. The state\u2019s Medicaid agency says it does not know how CMS calculated the overpayments or \u201cwhat is included in that amount, what time period it covers, and if or when it was collected,\u201d said spokesperson Tony Cava.<\/p>\n

California has an enormously complicated Medicaid program: It serves the largest population in the nation \u2014 nearly\u00a015 million people<\/a>\u00a0\u2014 with a budget of nearly\u00a0$200 billion<\/a>\u00a0this fiscal year.<\/p>\n

Matt Salo, a national Medicaid expert, said these types of mistakes happen in states throughout the country because the program is rife with overlapping federal and state rules. Salo and other policy analysts agreed that states have the authority to administer their Medicaid programs as they see fit and root out misuse of federal funds.<\/p>\n

And Michael Cannon, director of health policy studies at the libertarian Cato Institute, said the Trump administration\u2019s actions \u201cpersecute a minority that\u2019s unpopular with the powers that be.\u201d<\/p>\n

\u201cThe Trump administration cannot maintain that this effort has anything to do with maintaining the fiscal integrity of the Medicaid program,\u201d Cannon said. \u201cThere are so much bigger threats to Medicaid\u2019s fiscal integrity, that that argument just doesn\u2019t wash.\u201d<\/p>\n

Immigrants\u2019 Medicaid under attack<\/p>\n

National Republicans have targeted health spending on immigrants in different ways. The GOP spending law, which Trump calls the \u201cOne Big Beautiful Bill,\u201d will lower reimbursement to states\u00a0around the country<\/a>\u00a0in October 2026. In California, for example, federal reimbursement for immigrants without legal status will go to 50% for emergency services, down from 90% for the Medicaid expansion population, according to Cava.<\/p>\n

The Trump administration is also scaling back Medicaid coverage to immigrants with temporary legal status who were previously covered and\u00a0announced in August<\/a>\u00a0that it would provide states with monthly reports pointing out enrollees whose legal status could not be confirmed by the Department of Homeland Security.<\/p>\n

\u201cEvery dollar misspent is a dollar taken away from an eligible, vulnerable individual in need of Medicaid,\u201d CMS Administrator Mehmet Oz said in a statement. \u201cThis action underscores our unwavering commitment to program integrity, safeguarding taxpayer dollars, and ensuring benefits are strictly reserved for those eligible under the law.\u201d<\/p>\n

States under review say they are following the law.<\/p>\n

\u201cSpending money on a congressionally authorized medical benefit program that helps people get emergency treatments for cancer, dialysis and anti-rejection medications for organ transplants is decidedly not waste, fraud and abuse,\u201d said Mike Faulk, deputy communications director for Washington state Attorney General Nick Brown.<\/p>\n

Records show Washington Medicaid officials have been inundated with questions from CMS about federal payments covering emergency and pregnancy care for immigrants without legal status.<\/p>\n

Emails show Illinois officials met with CMS and sought an extension to share its data. CMS denied that request and federal regulators told the state that its funding could be withheld.<\/p>\n

\u201cThousands of Illinois residents rely on these programs to lawfully seek critical health care without fear of deportation,\u201d said Melissa Kula, a spokesperson for the Illinois Department of Healthcare and Family Services, noting that any federal cut would be \u201cimpossible\u201d for the state to backfill.<\/p>\n

___<\/p>\n

Shastri reported from Milwaukee.<\/p>\n

___<\/p>\n

KFF Health News<\/a>\u00a0is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF \u2014 the independent source for health policy research, polling and journalism.<\/p>\n

The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute\u2019s Department of Science Education and the Robert Wood Johnson Foundation. The AP is solely responsible for all content.<\/p>\n","protected":false},"excerpt":{"rendered":"The Trump administration is taking its\u00a0immigration crackdown\u00a0to the\u00a0health care safety net,\u00a0launching Medicaid spending probes in at least six…\n","protected":false},"author":2,"featured_media":137068,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[59],"tags":[10162,12,97,252,253,790,9042,1341,10907],"class_list":{"0":"post-137067","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-health-care","8":"tag-deportation","9":"tag-donald-trump","10":"tag-health","11":"tag-health-care","12":"tag-healthcare","13":"tag-immigration","14":"tag-insurance","15":"tag-medicaid","16":"tag-migration"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/137067","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=137067"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/137067\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/137068"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=137067"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=137067"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=137067"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}