Federal health officials moved Tuesday to halt more than $1 billion in Medicaid payments to California and Minnesota, demanding the states strengthen their efforts to root out fraudulent claims before funds are released.
The Centers for Medicare and Medicaid Services is deferring approximately $867.5 million from California and $199 million from Minnesota. Both states face the freeze after financial audits uncovered unsupported claims tied to in-home care services and other programs, the agency said.
CMS Administrator Mehmet Oz framed the action as essential protection of taxpayer dollars. "CMS is done trying to chase down stolen and misused funds after they've already left the building," he said.
The freeze marks the latest in a string of funding restrictions targeting Democratic-led states as part of the administration's broader fraud crackdown. California alone saw a $1.3 billion deferral announced in May, which CMS described at the time as the largest ever issued by the agency.
For California specifically, CMS cited rapid spending growth in certain in-home care programs that outpaced national trends. Officials said the state must provide additional documentation to justify the claims before the funds flow.
Minnesota faces similar demands across 14 separate service categories. The state's freeze includes scrutiny of expenditures linked to providers previously flagged during program integrity reviews. The action continues a pattern of federal attention to Minnesota's safety net funding, with the administration having previously cited the state's fraud challenges when justifying an ICE enforcement surge.
The Health and Human Services Department said it would also expand CMS authority to remove suspected bad actors from federal health programs and potentially prevent them from re-entering those programs in the future.
Separately, CMS announced a six-month moratorium on new enrollments in Medicare's hospice and home health provider categories, citing those sectors as key sites of fraudulent activity.
Author James Rodriguez: "Whether you view this as necessary vigilance or political targeting of blue states, the scale of documented fraud claims in these programs is real and demands explanation from state officials."
Comments