On Tuesday, Health and Human Services Secretary Robert F. Kennedy and Dr. Mehmet Oz, Administrator for Medicaid and Medicare Services, announced they will be pausing more than one billion dollars in Medicaid payments to Minnesota and California because of these states' failure to comply with the Trump administration's efforts to combat fraud and abuse of the Medicaid system.
Kennedy announced:
CMS is pausing more than a billion dollars in federal Medicaid payments to California and to Minnesota because of suspected fraud and non-compliance. That includes more than 867 million dollars for California and over 200 million dollars for Minnesota. If those states want that money, they have to provide documentation that these payments are legitimate.
That's a lot of cash that has flowed from the taxpayer without any accountability or oversight, but according to Dr. Oz, it's a conservative number.
"This is a very conservative approach, by the way, " Oz said. "We could have taken a lot more money. But this we believe is a very thoughtful and judicious way of moving forward."
WATCH:
.@SecKennedy announces the Trump Administration is pausing more than $1 billion in Medicaid payments to California and Minnesota due to suspected fraud and noncompliance.
— Rapid Response 47 (@RapidResponse47) July 21, 2026
"If those states want that money, they need to provide documentation that these payments are legitimate." pic.twitter.com/6VjDVZ0Ovu
Dr. Oz broke down this one billion number to brass tacks. First, they isolated "high-risk programs:" ones that billed four or more patients at the same time or who billed more than a year after the services were provided. Using AI-based auditing procedures, CMS isolated providers who had documentation gaps: for example, services provided to dead people.
In Minnesota, we're talking about 14 high-risk programs, high-risk service categories like personal care and home-based services. Again, often these are services that your family would typically have provided for you, that the federal government has started to fund, but unfortunately can be abused.
Roughly 413 million dollars in claims were under review this quarter, that was the total in Minnesota. Of that three million dollars, a little over that is tied to specific documentation gaps. As an example of a documentation gap, is charging us for care you provided to a deceased person. We're not going to pay for healthcare for dead people. And over three million dollars in Minnesota, you'll see California in a second, and billing for Medicare or rather, Medicaid beneficiaries or providers who are deceased is a red flag for us that you are not doing your homework well. Another portion of over 42 million dollars comes from claims tied to nearly 870 providers that we flagged through fraud protection analytics. We identify people who have been of a character that historically defrauded the government. We don't trust them, and when we see bills from them, we scrutinize them more aggressively.
Read More: Has Graham Platner’s Quiet Departure Been the Result of a Medicaid Fraud Case Involving His Wife?
With this strategy, CMS was able to not just defer current disbursements, but to claw back disbursements from prior quarters that showed the same issues.
However, the largest part of today's deferral comes from something that's new this quarter, and that's something worth paying attention to. Minnesota — all 50 states — but Minnesota in particular, was asked to audit all the people providing services in these high risk areas. And Minnesota itself disenrolled roughly 3,000 providers. Three-thousand providers who historically could send bills willy-nilly, and be fine, they themselves have disenrolled them for failed background checks, failed psych visits and other issues. This raises questions about the claims tied to these same providers in the quarter before they were removed. Again, Minnesota removed the providers, we looked back to see how much they billed us last quarter, and unfortunately, it was a lot.
Oz affirmed that this was the majority of the roughly $200 million that was put on pause for Minnesota.
As expected, California had the lion's share of fraud from these home support programs.
Oz continued:
Now let's go to California. This is the focus in California. It's called In Home Supportive Services, IHSS, again, going to someone's home, providing the care that sometimes their families would have offered. This provides care for seniors and for people with disabilities so they can remain safely in their own homes. Done correctly, these programs make sense. Over the past two federal fiscal years, California's spending in this program — this is a critical statistic — comparing state-to-state, California's spending in these in-home programs went up 24 percent. The rest of the country's average is about 12 percent.
So, California increased spending at twice the rate of the average of the rest of the entire nation. That doesn't make sense. That gap accounts for 391 million dollars of today's deferral. Another 250 million, quarter of a billion dollars, comes from claims tied to high-risk providers as I explained earlier: Those who are billing more than a year after the service is provided, those billing for four or more patients all at the same time, hard to juggle that many patients. If they ranked in the top two and a half percent of all billers, we were worried about them.
WATCH:
.@DrOzCMS: "Over the past 2 Fiscal Years...California's spending in these in-home programs went up 24%. The rest of the country's average is about 12%. So California increased spending at twice the rate of the average of the rest of the entire nation. That doesn't make sense." https://t.co/PG2aDYzS5Q pic.twitter.com/mtiBvjqvlk
— Rapid Response 47 (@RapidResponse47) July 21, 2026
Of course, this move by HHS and CMS did not sit well with the very people who were tasked with oversight of these programs, and ignored the fraud in the first place.
Minnesota Gov. Tim Walz decided to ramble that this was just Trump's way of cutting off healthcare for the folks, while funding tax cuts to his billionaire friends... or something.
This isn’t about fraud - it’s about cutting your healthcare so that Trump can afford the tax cuts he gave to billionaires.
— Governor Tim Walz (@GovTimWalz) July 21, 2026
They’re cutting more money in healthcare than they’ve prosecuted for fraud. The math doesn’t add up.https://t.co/2jl43FNdNU
And the theater kids who run California Governor Gavin Newsom's official account are having a normal one.
Today’s announcement from Dr. Oz is the same recycled political stunt we’ve seen before.
— Governor Newsom Press Office (@GovPressOffice) July 21, 2026
California isn’t being targeted because Trump has evidence of fraud. We are being targeted for political reasons — and because Dr. Oz doesn’t understand that we are *SAVING* taxpayers money… https://t.co/rYyTUSbLqC
Today’s announcement from Dr. Oz is the same recycled political stunt we’ve seen before.
California isn’t being targeted because Trump has evidence of fraud. 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!
We hate fraud. That’s not what this is. And we stand ready to collaborate with CMS in good faith efforts to combat fraud.
The pedophile enabler and the one under DOJ investigation want to pontificate about things not adding up. That's rich.
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