Washington — The Trump administration is pausing more than $1 billion in Medicaid payments to California and Minnesota as part of its crackdown on fraud in federal programs, Health and Human Services Secretary Robert F. Kennedy Jr. announced Tuesday.
The pause comes after reviews conducted by the Centers for Medicare and Medicaid Services, or CMS, identified claims that require an additional look before federal matching funds can be distributed to the two states, HHS said.
For California, the administration is holding back $867.5 million after it examined claims for some in-home care programs and found spending growth that outpaced national trends, it said. CMS is halting $199 million for Minnesota after reviewing claims in 14 high-risk service areas in the state that require further documentation.
For both states, the Trump administration said the funding is not being cut, since officials can provide more information to show that the “high-risk” Medicaid claims meet federal standards.
“Medicaid exists to serve vulnerable Americans — not to bankroll unsupported claims,” Kennedy said in a statement. “Under President Trump’s leadership, we are restoring accountability across our public programs and protecting taxpayer dollars.”
CMS Administrator Dr. Mehmet Oz said the payment deferrals for California and Minnesota are part of the administration’s “new approach to program integrity.”
“CMS is done trying to chase down stolen and misused funds after they’ve already left the building,” he said in a statement.
The Trump administration launched an anti-fraud task force earlier this year that is targeting potential abuses in federal programs in California and other states. The Justice Department announced in April that eight people were arrested and charged in connection with a healthcare and hospice fraud probe. Prosecutors said they defrauded the healthcare system out of more than $50 million.
A CBS News analysis from March found that more than 700 of the roughly 1,800 hospices in Los Angeles County trigger multiple red flags for fraud, as defined by the state of California.
As part of its efforts focused on abuses of federal public assistance programs, the Trump administration has in recent months stopped millions of dollars in federal funds from flowing to Minnesota, specifically, because of concerns about fraud and vulnerabilities in its programs.
The administration’s focus on combating fraud comes as more than 75 people have been charged for their alleged roles in a $250 million pandemic-era fraud scheme. Dozens of others have been charged in various other alleged fraud schemes involving public assistance programs.
The U.S. attorney in Minnesota estimated the total amount of fraud in the state could exceed $1 billion.
