The Trump administration announced Tuesday it is pausing more than $1 billion in federal Medicaid payments to California and Minnesota.
CMS said it is holding back $867.5 million for California after examining claims for some in-home care programs and finding spending growth that outpaced national trends, and $199 million for Minnesota after reviewing claims in 14 high-risk service areas that require additional documentation.
Health and Human Services Secretary Robert F. Kennedy Jr. said, "Medicaid exists to serve vulnerable Americans — not to bankroll unsupported claims." CMS Administrator Dr. Mehmet Oz said, "CMS is done trying to chase down stolen and misused funds after they've already left the building."
The administration launched an anti-fraud task force earlier this year targeting potential abuses in federal programs in California and other states, and the Justice Department announced in April that eight people were arrested and charged in connection with a healthcare and hospice fraud probe that prosecutors said defrauded the healthcare system out of more than $50 million.
The Department of Health and Human Services said it will expand its authority to remove bad actors from federal health programs and possibly bar them from returning; in May, CMS announced it would defer $1.3 billion in Medicaid funds to California and impose a six-month moratorium on enrolling new hospice and home health providers in Medicare.
The administration said the funding is not being cut and that state officials can provide additional information to show that the "high-risk" Medicaid claims meet federal standards.