The federal government will shut down some Medicaid reimbursements for Minnesota until the state takes concrete steps to shut down what the Trump administration has described as rampant fraud, particularly among the Somali immigrant community.
Vice President J.D. Vance announced the move at the White House on Wednesday, a day after President Trump named him the head of a “war on fraud.”
Mr. Vance said the goal was to “turn the screws” on Minnesota Gov. Tim Walz.
“You have people who are billing the government millions, tens of millions, billions of dollars in taxpayer dollars saying they’re providing a service but there’s no follow-up to ensure they’re actually providing those services,” the vice president said.
Mr. Vance said the service providers have already been paid and so the services will be delivered, but the feds are withholding reimbursement to the state government.
Mehmet Oz, head of the Centers for Medicare and Medicaid Services, pointed in particular to Medicaid autism services. He said a scam spreading in Minnesota, particularly in an immigrant community, involves autism support.
Outfits recruit parents, paying $1,000 apiece to parents to get an autism diagnosis for their children, then claiming millions of dollars in funding for services that it never actually delivers. Dr. Oz said one outfit claimed 450 days in which people worked more than 24 hours a day.
Minnesota stands to lose $259 million in deferred payments this month.
Dr. Oz said the point is to force the state to come up with a plan to combat fraud. He said the organizations that deliver the services should pressure Mr. Walz, a Democrat, to comply or else he risks losing money.
“This is not a problem with the people of Minnesota, it’s a problem with the leadership of Minnesota,” he said.
The Washington Times has sought comment from Mr. Walz’s office.
Dr. Oz also announced a nationwide moratorium on new firms signing up to be purveyors of durable medical equipment in Medicare. He said fraud in that area has exploded, with firms signing up to provide equipment and then asking for reimbursements for services they never deliver.
He said they figure there’s about $100 billion in fraud in federal medical spending.
Mr. Vance said other states will be targets. He bristled at the notion that autistic children would suffer.
“No, it’s hurting fraudsters,” he said.
He compared the lack of cooperation on fraud from Minnesota to the lack of cooperation in immigration enforcement.
Mr. Trump, in his State of the Union address Tuesday, declared the war on fraud and singled out “members of the Somali community” in Minnesota, whom he said had “pillaged” $19 billion in bogus benefits from federal taxpayers.
“This is the kind of corruption that shreds the fabric of a nation,” he said.
Mr. Trump said curtailing fraud would “balance our budget.”
Uncle Sam is poised to run a deficit of nearly $2 trillion this year. That far outstrips the levels of fraud that agencies have reported.
