HHS Pausing $1 Billion in Medicaid Payments to California, Minnesota Over Fraud
“That includes more than $887 million for California and over $200 million for Minnesota.”
The U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) have paused more than $1 billion in Medicaid payments to California and Minnesota due to fraud concerns.
“That includes more than $887 million for California and over $200 million for Minnesota,” HHS Secretary Robert F. Kennedy Jr. said at a press conference. “If those states want that money, they need to provide documentation that these payments are legitimate.”
From the press release:
CALIFORNIA
CMS reviewed California’s claims for certain in-home care programs after identifying spending growth that far exceeded national trends and other claims that require additional documentation. As a result, CMS is deferring approximately $867.5 million in federal Medicaid payments until the state provides the information needed to support those claims.
MINNESOTA
CMS also reviewed Medicaid claims in 14 high-risk service areas in Minnesota. The review identified claims that require additional documentation, including expenditures linked to providers flagged through program integrity reviews and other claims with potential eligibility or billing concerns. CMS is deferring approximately $199 million in federal Medicaid payments while that review continues.
CMS Administrator Dr. Mehmet Oz explained how the Trump administration wants receipts for expenditures, but asked states to “focus on high-risk services” involving “unlicensed individuals in unsupervised settings.”
Those areas are ripe for fraud, which, unfortunately, HHS has discovered in California and Minnesota:
Those services, because they’re high risk, demand that we’re more thoughtful, more insightful about how we audit them and decide that they’re legitimate or not. These are the areas where the data tells us that there is fraud and waste, and they’re likely to occur. They do occur, and we’re identifying it with unfortunate ease in the system.
When there are signature and significant outliers, patterns that we’ve identified, anomalies that seem to happen again and again and again. Federal law mandates requires us to pause that funding so that the states fix the problems.
That is the story behind today’s announcements. In Minnesota and California, our reviews are going back to just over the last few years, turned up the same recurring theme again and again every single quarter: Claims in these same high-risk categories that the states have not yet been able to document fully and acceptably to the federal government. Claims that are unresolved and claims that smell like fraud.
And if it smells like fraud, we’re not paying for it anymore.
.@DrOzCMS: "Today, we are calling on two states… California and Minnesota. We want them to come alongside us, federal partners, to ensure that Medicaid dollars go to the services that are required by REAL people, with REAL problems, getting REAL care." pic.twitter.com/mPK9dGL2q3
— Rapid Response 47 (@RapidResponse47) July 21, 2026
Potential Medicaid fraud has haunted California and Minnesota for months. But we’ve also seen fraud in Ohio and New York City.
The Trump administration already withheld $1.3 billion in Medicaid payments to California after the anti-fraud task force suspended almost 500 hospice and home health care businesses in Los Angeles.
In May, the DOJ charged 15 defendants in Minnesota for allegedly running fraud schemes totaling $90 million.
A month later, the DOJ charged another 450 defendants across 56 U.S. attorneys’ offices and 45 states and territories for allegedly participating in healthcare schemes involving over $6.5 billion.
It’s just insane.
- DOJ: 450 Defendants Charged for Alleged Healthcare Fraud for $6.5 Billion
- DOJ: 15 in Minnesota Charged With Allegedly Running Fraud Schemes Targeting $90 Million
- J.D. Vance Announces Suspension of $1.3 Billion in Medicaid Payments to California
- JD Vance Suspends 447 More Hospices in L.A. in Ongoing Battle Against Fraud
- A Burrito Stand Qualifies for Hospice Funding Under California’s Medicaid System
- ‘Minnesota was Big, but California is Even Bigger’: Investigations Reveal Massive Hospice Fraud
- Vance: Admin Halting Some Medicaid Funds to Minnesota Due to Fraud Scandal
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Comments
Have they sued for the money yet? They’re going to sue rather than complying. Hopefully DoJ will have the beginnings of their response written already.
Also, why are the numbers so small? It seems to me that they should be MUCH bigger.
Interesting idea, HHS should sue the states to get the money back.
Good, shut off that money looting spigot
Get ready for the squealing! Politicians, Unions, NGOs, ‘Charities’, the ‘home health’ providers … all gonna squeal like stuck pigs. The day is fast approaching when these programs are gonna be ended if the States refuse to be accountable, provide basic cooperation with Feds and balk at basic good stewardship in favor of grift, graft and malfeasance. There’s really only two workable alternatives to good faith cooperation by the States; end the program entirely or hire enough additional Federal employees to administer these programs directly removing any State hands touching the $ and reversing the money flow on these State/Federal partnership programs by requiring the States to pony up their portions of the funding to the Federal government. The idea of a Fed Govt that large is Cray Cray b/c the next d/prog Admin will run wild with that much power.
And a federal court judge will immediately be issuing a court order requiring the money to be paid over to California and Minnesota in 3 . . .2 . . . 1 . . .
You all know it’s gonna happen.
eot
I am a medical doctor in Florida.
I had a second job looking for Medicaid and Medicare fraud at clinics in Miami..
I would go down there once a month and review charts to make sure that the clinics actually existed, had patients and therapists, and that the services billed were actually documented as performed.
I found some shady stuff, reported it to the government and dropped those clinics.
I thought I was doing a service looking for fraud.
GEICO did not want to pay for these services as they were delivered by licensed massage therapists under the supervision of a medical doctor.
So they sued me and all the clinics.
The Federal government and all the other insurance companies accept these range of motion and heat/cold treatments given by licensed massage therapists.
I had to settle with them and quit the fraud hunting business
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