The U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) deferred more than $1 billion in federal Medicaid payments to California and Minnesota as the states submit additional documentation supporting certain high-risk Medicaid claims, according to a July 21 announcement. The action is part of an effort by the Trump administration to address fraud, waste, and abuse in Medicaid programs.
“Medicaid exists to serve vulnerable Americans — not to bankroll unsupported claims,” said HHS Secretary Robert F. Kennedy, Jr. “Under President Trump’s leadership, we are restoring accountability across our public programs and protecting taxpayer dollars. I appreciate CMS Administrator Dr. Oz’s leadership in strengthening Medicaid program integrity and ensuring federal funds are spent as Congress intended. States that receive federal Medicaid funding must demonstrate that every dollar meets federal requirements. When they cannot, we will not release federal funds until they do.”
CMS is deferring approximately $867.5 million in federal Medicaid payments to California after focused financial reviews identified claims requiring further review before releasing matching funds. In Minnesota, CMS is deferring about $199 million following a review of 14 high-risk service areas where some expenditures were linked to providers flagged through program integrity reviews or showed potential eligibility or billing concerns.
“These are payment deferrals (not permanent funding cuts) and both states will have the opportunity to provide documentation showing the claims meet federal Medicaid requirements,” HHS said.
Additionally, under Secretary Kennedy’s direction, HHS and its Office of Inspector General continue using exclusion authorities as a tool to remove bad actors from Medicare and Medicaid programs — sometimes permanently barring them from returning.
“CMS is done trying to chase down stolen and misused funds after they’ve already left the building,” said CMS Administrator Dr. Mehmet Oz, “That’s why we’re deferring payments with respect to certain high-risk services within the Medicaid programs in California and Minnesota as part of our proactive new approach to program integrity. By stopping waste and fraud before the check clears, CMS is delivering record-high savings for taxpayers and ensuring that their hard-earned dollars reach the vulnerable Americans Medicaid is meant to serve.”