SerpApi.Org
The Trump Administration is pausing Medicaid payments to California and Minnesota, the latest step in the government’s crackdown on alleged fraud in largely Democrat-led states.
The Centers for Medicare and Medicaid Services (CMS) is withholding $867.5 million in payments to California and $199 million to Minnesota, the Department of Health and Human Services announced on Tuesday.
Health Secretary Robert F. Kennedy Jr. cited “suspected fraud and noncompliance” in the states as the reason for the deferrals, allegations that both states have rejected. Kennedy said CMS is reviewing claims related to in-home care programs in California and 14 high-risk Medicaid service areas in Minnesota that the state’s legislative auditor had previously identified as vulnerable to fraud.
“If those states want that money they need to provide documentation that these payments are legitimate,” Kennedy said at a press conference. He did not publicly present audits or other evidence demonstrating fraud, but pointed to rapid growth in Medicaid spending in California.
Trump officials said the funding is not permanently cut but deferred until states provide information to support the claims.
The Trump Administration has repeatedly singled out California and Minnesota over alleged fraud in publicly funded programs and withheld billions of dollars in federal payments to the two states across multiple actions this year. The White House has ramped up its public campaign against fraud, including creating the role of fraud czar. Trump has also publicly urged the Justice Department to pursue investigations into alleged fraud in the two states.
“If it smells like fraud, we’re not paying for it anymore,” CMS Administrator Dr. Mehmet Oz said at the Tuesday press conference.
The Trump Administration has argued that certain states have not adequately policed fraud, costing taxpayers billions of dollars per year. Critics, however, have said that the Administration has not provided evidence of fraud and that the investigations are politically motivated. Critics have also argued that the deferrals delay legitimate payments to vulnerable groups, and could ultimately lead to higher costs for taxpayers if providers reduce services and patients are forced to turn to more expensive forms of care.
California and Minnesota push back against fraud claims
California Gov. Gavin Newsom, a Democrat and prominent Trump critic, rejected the fraud allegations as a “recycled political stunt.” His press office said in a post on X that the state would “collaborate with CMS in good faith efforts to combat fraud.”
The governor’s press office said the Trump Administration’s withholding of Medicaid payments will harm seniors and people with disabilities, and argued that doing so would ultimately cost more for taxpayers.
“California isn’t being targeted because Trump has evidence of fraud,” Newsom’s press office said. “We are being targeted for political reasons — and because Dr. Oz doesn’t understand that we are *SAVING* taxpayers money by keeping seniors and people with disabilities out of far more expensive nursing homes!”
Newsom, who is considering a 2028 presidential run, has previously accused the Trump Administration of targeting him, his wife, and the state for political reasons. Last month, Newsom said the DOJ was pursuing investigations into his inner circle that he alleged were politically motivated. He has also publicly sparred with Trump, including over the federal government’s deployment of National Guard troops to Los Angeles to quash protests against immigration enforcement. Newsom also led a Democratic effort to redraw California’s congressional map in response to a Trump-backed Republican redistricting push in Texas, and signed a bill in May to safeguard California’s elections over fears that the Trump Administration would interfere in the voting process
Minnesota Gov. Tim Walz, a Democrat who ran alongside Kamala Harris in the 2024 presidential election, said the move “isn’t about fraud - it’s about cutting your healthcare so that Trump can afford the tax cuts he gave to billionaires.”
“They’re cutting more money in healthcare than they’ve prosecuted for fraud,” Walz posted on X. “The math doesn’t add up.”
Part of a broader, albeit targeted, fraud crackdown
The Trump Administration has led a broad crackdown on alleged fraud in federal programs that has appeared to focus on Democrat-led states. In February, Kennedy, Oz, and Vice President J.D. Vance announced a government-wide initiative to “crush fraud” in health care programs like Medicaid. Kennedy has said that the campaign is aimed at preventing improper payments instead of recovering them after the fact, with the Administration increasingly using payment deferrals and pre-payment reviews of Medicaid claims.
As part of the initiative, prosecutors last month charged 455 defendants across 45 states and territories in schemes allegedly involving more than $6.5 billion in false health care claims. Officials described it as the largest coordinated health care fraud enforcement action in DOJ history.
The White House also launched an anti-fraud task force in March, and announced “an unrelenting, full-scale assault.” Since February, the Trump Administration has deferred multiple payments to California and Minnesota, pausing billions of dollars in federal reimbursements to the states.
The Administration has charged nearly 80 people for their alleged involvement in a $250 million pandemic-era Feeding Our Future fraud scheme in Minnesota, with 65 defendants convicted as of April. The investigation was initiated in 2021 under the Joe Biden Administration. U.S. Attorney in Minnesota Daniel Rosen estimated that the total amount of fraud in Minnesota’s public programs could exceed $1 billion.
In April, the Justice Department announced that eight people were arrested and several more charged in connection with a federal health care and hospice fraud investigation in Southern California. Prosecutors alleged that the schemes involved more than $50 million in intended health care fraud losses.
