The Trump administration is pausing more than $1 billion in Medicaid payments to California and Minnesota in its effort against fraud in government health insurance programs, Health Secretary Robert F. Kennedy Jr. announced Tuesday.
The administration will withhold more than $867 million in payments from California and more than $200 million for Minnesota, officials said. It’s the second time the administration is pausing large payments for the program for low-income Americans, which is run by states but partly funded by the federal government.
“If those states want that money, they need to provide documentation that these payments are legitimate,” Kennedy said at a press conference Tuesday.
Democrats have accused the administration of targeting blue states. CMS has asked all 50 states to revalidate high-risk providers but has only withheld Medicaid payments from California and Minnesota.
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California Gov. Gavin Newsom’s office referred NOTUS to a post on X that said the state offered to collaborate with the Centers for Medicare & Medicaid Services “in good faith” to address fraud, and described Tuesday’s action as “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,” the statement said. “We are *SAVING* taxpayers money by keeping seniors and people with disabilities out of far more expensive nursing homes. We hate fraud.”
Minnesota Gov. Tim Walz said the funding pause was part of the larger “campaign of retribution against Minnesota.”
“The Trump Administration is cutting more money in healthcare than they’ve prosecuted for fraud,” he said in a statement to NOTUS. “The math doesn’t add up. They’re not punishing fraudsters, they’re punishing children, seniors, working families, and people with disabilities.”
CMS announced earlier this year it was withholding more than $1.5 billion from California and Minnesota, citing high rates of fraud among hospice, home health care and daycare providers. Medicaid Director Dan Brillman said Tuesday those payments are still under review.
The federal government has always been able to defer federal Medicaid payments if they appear suspect, but the size of the payments currently being withheld is unprecedented, experts say.
The Trump administration has made tackling fraud in health care, housing and education programs a major part of its agenda ahead of the midterm elections. A fraud task force led by Vice President JD Vance has also demanded states revalidate Medicaid providers at high risk of fraud and prevented some types of providers from entering the program.
“The anger that America feels crosses party lines on this issue,” said CMS Administrator Mehmet Oz, who has posted videos of himself accompanying law enforcement officers confronting providers suspected of fraud.
“It’s very, very difficult for anyone in any part of the political spectrum to think it makes sense to throw money away,” he said Tuesday.
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