J.D. Vance Announces Suspension of $1.3 Billion in Medicaid Payments to California

Medicaid fraud in California is rampant, and as my colleague Mary Chastain noted in March, Vance’s anti-fraud task force suspended 70 hospice and home health care businesses in Los Angeles.

The move came shortly after investigations by CBS News and Nick Shirley revealed a fraud scheme in California involving hospices.

Vance’s task has then suspended over 400 more.

Now the Vice President has announced on Wednesday that the Trump administration is withholding $1.3 billion in Medicaid payments to California and is threatening to suspend federal funding to all states if they don’t aggressively prosecute fraud in their Medicaid programs.

“There are California taxpayers and American taxpayers who are being defrauded because California isn’t taking its program seriously, but also you have people who have been prescribed medications that they don’t even need. They’ve had drugs put into their bodies that they don’t need because fraudsters have actually encouraged false prescriptions and false administration of medications,” Vance said at the White House.

The move is similar to the one the administration took in February suspending Medicaid payments to Minnesota.

Vance said that the administration is also notifying all 50 states that it could freeze funding to their Medicaid Fraud Control Units “if they do not aggressively prosecute Medicaid fraud.” The units, which exist in each state, investigate and prosecute Medicaid provider fraud. “We are going to turn off the money that goes to these anti-fraud units,” he said, if they fail to do their job.

Vice President JD Vance just announced a sweeping new crackdown on Medicaid fraud today by sending letters to all 50 states.

"We are sending letters that will require them to show that they are effectively and aggressively prosecuting Medicaid fraud in their states."

"If they… pic.twitter.com/TsfFRvyjm3

— Turning Point Action Rapid Response (@TPARapidRep) May 13, 2026

Dr. Mehmet Oz, the administrator of the Centers for Medicare and Medicaid Services, reviewed his shocking discovery regarding hospices in the state.

Oz called out what he said was widespread fraud in hospice services and similar in-home care programs nationally — and particularly in the Los Angeles region — and announced a six-month moratorium on new Medicare enrollment for hospices and home health agencies.

“A third of all these programs in the entire country are in Los Angeles. Ask yourself, how is that possible? It’s not,” Oz said. “They’re not that many people dying in Los Angeles. We’re not talking about California, just Los Angeles.”

He said he and others in the administration determined that “at least half of the hospices, in the entire area around Los Angeles, are fraudulent,” and had shut down 800 of them that last year had “charged the federal taxpayer $1.4 billion,” which “will no longer be paid.” That is a major increase from the 450 providers the administration said it had suspended as of last month.

As an especially important reminder, my colleague Mary Chastain noted that California Gov. Gavin Newsom knew about the scale of the fraud for years. House Oversight Committee Republicans shared their findings about Newsom’s administration.

Your administration has been aware of credible reports of hospice fraud for at least four years. According to a March 29, 2022 report from the California State Auditor, Los Angeles County, the state’s most populous county, has experienced a 1,500 percent increase in registered hospice providers since 2010.5

This increase, which totals more than 2,800 providers in the State, is more than six times the national average of hospice agencies relative to Los Angeles County’s senior population. This is greater than the number of hospice providers in 36 states combined and 33 times greater than the entire state of Florida.

Additionally, Oz’s agency announced a nationwide six-month moratorium on all new Medicare enrollments by hospice and home care providers.

“Today we’re shutting the door on fraud — preventing new bad actors from entering Medicare while we aggressively identify, investigate, and remove those already exploiting them,” he said in a statement.

Existing hospice and home health care providers will continue to operate as usual. But CMS said it will “intensify targeted investigations, deploy advanced data analytics, and accelerate the removal” of providers in the category that are suspected of fraudulent activity.

Such a freeze is not unprecedented, said Tricia Neumann, a senior vice president and executive director for the program on Medicare policy at the health care research nonprofit KFF. She said President Bill Clinton’s Democratic administration also imposed a temporary moratorium on home health agencies.

The Centers for Medicare and Medicaid Services have announced that it is placing a six-month moratorium on new enrollment of health providers in Medicare – its latest effort to combat what it says is widespread fraud among hospice and home health providers.… pic.twitter.com/s9PgRe714l

— CNN (@CNN) May 13, 2026

The scale of California’s Medicaid and hospice fraud is no longer a “policy concern” but a full-blown indictment of years of political indifference, and the aggressive response led by Vance and backed by Oz signals that the era of looking the other way is over.

When a single metropolitan area can host a third of the nation’s hospice providers, many of which are allegedly fraudulent, it’s an epic failure of governance.

By shutting off the federal funding spigot that has been flooding California and other states, Vance is forcing a long-overdue reckoning. If state leaders won’t police their own programs, the current administration in Washington clearly will.

Hopefully, taxpayers will begin to see that accountability is more than just a campaign slogan….just in time for the midterms.