The federal government is pausing more than $1 billion in Medicaid payments to two states, Health Secretary Robert F. Kennedy Jr. said on July 21.
The Centers for Medicare and Medicaid Services (CMS) is withholding more than $867 million from California and more than $200 million from Minnesota.
Advanced analytics, identified through financial investigation and artificial intelligence, identified suspicious activity and potential fraud, officials said.
“Every dollar the federal government allows to be lost to fraud, waste, and abuse is a dollar stolen from American patients and the American taxpayer. That’s money that should be going to legitimate health care,” Kennedy told a press conference in Washington.
He added later, “If those states want that money, they need to provide documentation that these payments are legitimate.”
Minnesota Gov. Tim Walz, a Democrat, told The Epoch Times via email, “The Trump Administration is cutting more money in healthcare than they’ve prosecuted for fraud. The math doesn’t add up. They’re not punishing fraudsters, they’re punishing children, seniors, working families, and people with disabilities. This is about cutting healthcare for people they don’t care about in their campaign of retribution against Minnesota.”
Walz’s office said that he has been combating Medicaid fraud, including halting 745 payments since January.
California Gov. Gavin Newsom said on X that California was being targeted for political reasons.
“We hate fraud. That’s not what this is. And we stand ready to collaborate with CMS in good faith efforts to combat fraud,” he wrote.
Medicaid is a federal health program. About 67 million Americans were enrolled in Medicaid as of March. Medicaid is administered by states, which must follow federal requirements, and is funded by both the federal government and states.
Dr. Mehmet Oz, the CMS administrator, told reporters on Tuesday that officials want the states to help the federal government make sure the funds are going to “real people with real problems getting real care.”
Among the problems identified, he said, was the federal government being charged for providers providing care for deceased people and providers billing for services provided more than a year prior.
He also said that California’s spending on support services for people at their homes increased 24 percent in recent years, which was about twice the average across the other states.
“If it smells like fraud, we’re not paying for it anymore,” Oz said.
Dan Brillman, director of Medicaid, said during the briefing that the Trump administration is still withholding an additional $259 million from Minnesota and $1.3 billion from California that officials said they were pausing earlier in the year.
Federal Trade Commission Chairman Andrew Ferguson, vice chairman of the White House’s Anti-Fraud Task Force, said on Tuesday that the administration is also focused on sending people who commit fraud to jail, pointing to how federal prosecutors in June said they’ve charged 455 people, including 90 doctors and other medical professionals with licenses, with participating in health care fraud and opioid abuse operations.
