Vice President J.D. Vance said that the White House is withholding $1.3 billion in federal Medicaid reimbursements to California, alleging that the state is not taking Medicaid fraud “seriously,” NBC News reported May 13.
CMS Administrator Mehmet Oz, MD, said California’s Medicaid records “generated major red flags” and that the administration needs the state to clarify $630 million in billing, $500 million in home health service and $200 million in “questionable expenditures” allegedly linked to coverage for undocumented immigrants, according to the report.
Dr. Oz said the $1.3 billion California withholding is the largest deferral the agency has ever made. In February, CMS announced it was freezing $259.5 million in Medicaid funding to Minnesota, citing unsupported or potentially fraudulent claims in the state’s program.
California Attorney General Rob Bonta alleged that California appeared to be targeted “solely for political reasons” in a post on X.
“My team is carefully reviewing all available information,” Mr. Bonta said in the post. “We have not hesitated to challenge unlawful actions by the Trump Administration, and we will continue to act whenever Californians’ rights or access to critical services are threatened.”
Mr. Vance said the administration is also notifying all 50 states that it could freeze funding to their Medicaid Fraud Control Units if they fail to aggressively prosecute Medicaid fraud, according to the report. These units, which operate in each state, investigate and prosecute Medicaid provider fraud.
“And if we continue to find problems, we can turn off other resources within their state Medicaid programs as well,” Mr. Vance said, according to the report.
CMS also announced May 13 it was imposing a six-month nationwide moratorium on new Medicare enrollments for hospices and home health agencies as part of a broader effort to combat Medicaid fraud, waste and abuse.
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