The Centers for Medicare and Medicaid Services is pausing more than $1 billion in federal Medicaid payments to California and Minnesota because of suspected fraud and noncompliance, Health Secretary Robert F. Kennedy Jr. announced Tuesday.
More than $867 million for California and $200 million for Minnesota will be withheld.
“If those states want that money, they need to provide documentation that these payments are legitimate,” Mr. Kennedy said.
If California Gov. Gavin Newsom or Minnesota Gov. Tim Walz want the funding released, “all they have to do is provide basic documentation showing that these services are legitimate and not fraudulent, and that’s common sense,” he said.
The Trump administration took several steps to crack down on Medicare and Medicaid fraud in February, including deferring almost $260 million of quarterly federal Medicaid funding in Minnesota while the feds completed a fraud investigation.
A massive Medicaid fraud scheme by Somali-run daycare centers in Minnesota was exposed late last year. Federal investigators and state officials uncovered systemic fraud in Minnesota child care and food programs, and these investigations have led to the convictions of dozens of individuals.
Medicare dolled out $57 billion in improper payments — of which fraud is included, but not the whole number — for the 2025 fiscal year, while Medicaid’s improper payments totaled $37 billion, according to an April congressional watchdog report.
Mr. Kennedy said that $42 billion in Medicare fraud has been identified thus far.
