Vice President JD Vance and the White House task force he heads that aims to eliminate fraud announced Wednesday that the administration would withhold billions in Medicaid funding from California because the state isn’t doing enough to prevent fraud in its federal benefit programs.

Vance said California’s inaction was to blame for the loss of funding.

“The simple reason is because the state of California has not taken fraud very seriously,” Vance said, adding that taxpayers in California and nationwide should be viewed as victims in the case.

Vance and Mehmet Oz , the administrator for the Centers for Medicare and Medicaid Services pointed to a few purported instances in California that have led the administration to believe that fraud is rampant. While laying out the case for California’s purported fraud issues, Oz said a third of all federally funded hospice programs in the U.S. are in Los Angeles.

But California Gov. Gavin Newsom’s press office directed NOTUS to posts on X that said Oz was overstating the extent of potential fraud in the state by inflating the number of programs to which the administration has shut off funding.

“We hate fraud. But that’s NOT what this is,” Newsom’s office wrote. “Vance and Oz are attacking programs that keep seniors and people with disabilities OUT of nursing homes. Pretty sick.”

The actions announced against California are the latest chapter in the White House’s use of benefits fraud claims to undergird punitive actions against a blue state. The administration previously withheld funding from Minnesota, which has been the epicenter of the administration’s anti-fraud crusade due to well–documented benefit fraud that has resulted in dozens of convictions.

Though Vance repeatedly said it wasn’t a partisan issue, Democratic-led states including California, New York and Minnesota have repeatedly been the subject of federal funding cuts and threats to cut funding from different agencies in the Trump administration.

Minnesota Attorney General Keith Ellison sued CMS and the Department of Health and Human Services after the Trump administration withheld the state’s Medicaid funds, calling the allegations of noncompliance with Medicaid regulations “vague.”

A judge denied Minnesota’s request for a temporary restraining order to restore the funding.

“Though Minnesota credibly complains that the federal government’s deferral is historically unprecedented in its size and timing, I conclude on this record that the deferral likely complies with the controlling federal regulations,” U.S. District Court Judge Eric C. Tostrud wrote in his April ruling.

The Trump administration is withholding funds from the states by “deferring” them, or pausing them, so that the federal government can review whether the money is being used in a way that complies with regulations. It’s a normal governmental tool, but the scale of the Trump administration’s use of it — $259 million in Minnesota and $1.3 billion in California — is unprecedented.

At a news conference before Vance’s announcement, Minnesota State Auditor Julie Blaha said the federal government wasn’t holding up its end of the bargain by releasing funds once the state complies.

“One of the challenges we’re having in Minnesota is that even though we are doing what they ask — we’re improving what we’re doing, we’re going above and beyond in fixing fraud issues in our state — yet they are still holding the funds up,” she said. “So if you’re going to do it, do it right. Go ahead and do the audit, but when the audit shows that things are improving and people are doing what you need them to do, then you’ve got to hold up your end of the deal too.”

Vance did not enumerate in the news conference the steps states would have to take to see funding restored. His office did not immediately respond to a request for comment.

In addition to auditing the Medicaid Fraud Control Units of all 50 states, the administration also said it would temporarily suspend Medicare enrollments for new home healthcare and hospice providers, and cut funding from a list of home healthcare centers across the country that the administration suspected of committing fraud.

The White House task force, established by executive order in March, has already resulted in billions of dollars in fraud prevention, Vance said.