The Trump administration is pausing federal Medicaid funding for Minnesota and California after months of uncovering billions of dollars in alleged fraud.Health and Human Services Secretary Robert F. Kennedy Jr. announced that the department is pausing roughly $867 million to California and over $200 million for Minnesota after the states did not provide requested documentation for federal audits of their Medicaid programs, which provide health coverage for low-income and disabled people.“We have a duty to stop the payments, demand answers, and then follow the evidence wherever it leads,” Kennedy said. “If Governor Gavin Newsom or Governor Tim Walz wants this funding released, all they have to do is provide basic documentation showing that these services are legitimate and not fraudulent, and that’s common sense.”
Mehmet Oz, the Centers for Medicare and Medicaid Services administrator, said his agency specifically requested receipts from fraud-prone services, such as for personal care facilities, in-home services, and medical devices. The states did not fully comply with the agency’s request to provide documentation for their spending.“If it smells like fraud, we’re not paying for it anymore,” Oz said. “Today, we are deferring over $1 billion in federal Medicaid dollars to Minnesota and California until they can substantiate their claims from this past quarter’s audits.The announcement comes as part of the Trump administration’s broader attempt to crack down on healthcare-related fraud. Oz announced earlier this month, during a press conference in Wisconsin with the White House Anti-Fraud Task Force, that his agency identified a 7,100% spike in Medicare claims for skin substitutes in the past six years, uncovering billions in potential fraud. Oz’s agency also found alleged fraudulent claims for durable medical equipment, such as wheelchairs, walkers, and hospital beds. According to CMS, payments have been suspended to 102 durable equipment suppliers, and billing privileges have been revoked for 725 suppliers.BIPARTISAN PUSH MOUNTS FOR HOSPITAL PRICE TRANSPARENCY BILLS BEFORE AUGUST RECESSLast month, the Justice Department and HHS announced a nationwide crackdown on healthcare fraud, spanning 57 federal districts across 41 states and territories. The investigation involved more than $6.5 billion in fraudulent claims and charges against 455 defendants, including 90 licensed medical professionals.This is a developing story and will be updated
