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Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services, told Newsmax on Tuesday that his agency is freezing more than $1 billion in federal Medicaid payments to California and Minnesota, an action the Department of Health and Human Services confirmed hours earlier as the largest step yet in the Trump administration's push to stop questionable payments before they are made.
On "Carl Higbie: FRONTLINE," Oz said the deferrals reflect a deliberate shift from chasing stolen funds after the fact to preventing them from being disbursed in the first place.
"We're not letting the money leave the building," he said, calling the focus "critical" to stopping tens of billions from going out the door.
HHS announced that about $867.5 million was withheld from California and $199 million from Minnesota, pending documentation of high-risk claims.
The action follows earlier deferrals totaling roughly $400 million against Minnesota this year and a $1.3 billion deferral against California in May, according to Stateline.
Oz said California's growth rate for in-home services runs at roughly twice the national average, a disparity he said the state has not explained.
CNN reported the same figure when Vice President JD Vance unveiled the earlier California freeze.
"If you can't explain it, we're not going to pay you," Oz said.
The administrator pointed to billing records showing payments for dead people.
He said CMS will halt about $5 million in California payments tied to deceased beneficiaries and roughly $2 million more in Minnesota.
"How could your accounting work [have been done] that poorly, that we would be forced to call you out on that?" Oz asked. "I'm not saying all the fraud is dead people. I'm saying the fact that you have, in just these two examples, $8 million going to pay for dead people's healthcare defies belief."
On coverage for people in the country illegally, Oz said CMS has stopped "another 200-plus million dollars just this quarter" in California billing and now cumulatively withheld $2 billion the state was billing the federal government for medical care provided to illegal aliens.
He said California has already repaid $1 billion. Forbes has tracked the same $1.3 billion figure at the center of the earlier dispute.
"If you live in California, you should be upset," Oz said, arguing that state taxpayers ultimately absorb the cost.
Oz framed the pattern as intentional, describing what he called "Medicaiding it," a practice in which states shift expenses to Washington by routing residents into Medicaid-funded job programs.
He singled out home healthcare aides paid through Medicaid who are then unionized by state-affiliated unions.
"Those unions are using those tax dollars to fund politics in those states," he said. "That to me is political patronage. That has to stop."
The vice president is coordinating a government-wide anti-fraud task force, drawing on the Justice Department, the FBI and Treasury forensic accountants, Oz said, with CMS newly empowered to act on its own without waiting for other agencies.
California Gov. Gavin Newsom has rejected fraud allegations tied to in-home services, saying the program keeps older and disabled residents out of costlier nursing homes.
Minnesota Gov. Tim Walz, whose state Department of Human Services says CMS approved a corrective action plan in March, called the federal characterization a misrepresentation of the state's fraud-fighting efforts.
The deferrals are pauses, not permanent cuts. Both states can recover the funds by supplying documentation that the underlying claims meet federal requirements.
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