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:
CALIFORNIACMS 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.MINNESOTACMS 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.
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.
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