Latest: Trump administration pauses $259 million in Minnesota Medicaid funding
The latest federal action came Wednesday when Vice President JD Vance announced the temporary halting of $259 million in Medicaid payments to Minnesota, a move is tied to alleged fraud and will remain in place until the state submits a corrective plan.
Latest move follows State of the Union 'war on fraud' charge
President Donald Trump had tasked Vice President Vance with waging a “war on fraud” at the State of the Union address Tuesday night, and Vance announced the pause in payments the following day. Vance said the funds will be paused “until the state government takes its obligations seriously to stop the fraud that’s being perpetrated against the American taxpayer. ”
Officials cite Medicaid 'scammers' but offered limited evidence
Dr. Mehmet Oz, administrator for the Centers for Medicare and Medicaid Services, said Wednesday that officials identified “scammers” who he claimed “hijacked … a certain part of the Minnesota Medicaid system, ” and he said there is more to come. The administration did not provide detailed evidence on Wednesday of the alleged large-scale Medicaid fraud Oz described.
Recent freezes and prior convictions in Minnesota social services fraud
The pause follows earlier federal actions: in December federal officials froze $185 million in child care funds to Minnesota, and last month the administration announced it was freezing $10 billion in funding for social services programs in five Democratic-led states, including Minnesota. Federal prosecutors have confirmed large-scale social services fraud in Minnesota, with dozens of people — many of whom are Somalis — convicted of stealing more than $1 billion in public funds intended for food, housing and services for people with disabilities.
Alleged schemes, specific examples and disputed details
Vance pointed to a program he said claimed to offer after-school services to autistic children but did not actually do so; he did not provide identifying information about the program. Oz added that the top fraudulent biller in the state “submitted 450 days where they claim they were working more than 24 hours a day, ” but he also did not provide corroborating information. Oz said these schemes “disproportionately involve immigrant communities, ” and noted that generally undocumented people are not able to be enrolled in Medicaid.
Who is covered and who will decide when funds are released
Health policy research organization KFF data show Medicaid covers nearly 1. 2 million kids and adults in Minnesota, more than half of whom are nursing home residents, and that more than three-quarters of Medicaid enrollees in the state are working full time. Oz said the federal government will only release the funds “after they propose an act on a comprehensive corrective action plan to solve the problem, ” and he gave Gov. Tim Walz, D-Minn., 60 days to submit that plan.
Officials signal broader actions and local reactions
Oz suggested similar announcements could come in other states “soon, ” and specifically mentioned Florida, New York and California as potential future targets. Oz also said, “This is not a problem with the people of Minnesota. It’s a problem with the leadership of Minnesota and other states who do not take Medicaid preservation seriously. ” The context also included the fragment “In a post on X on Wednesda” — unclear in the provided context.
Federal officials say the funds will remain paused until Minnesota proposes a comprehensive corrective action plan and Gov. Tim Walz has 60 days to present it; officials also signaled possible similar actions in Florida, New York and California.
