Medicaid halts some funding to Minnesota due to fraud concerns

Vice President JD Vance said the federal government halted millions in Medicaid funding to Minnesota amid concerns over potential fraud involving federal funds intended for personal care and home- and community-based services in the state.

Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz said the federal government had deferred $259 million in Medicaid payments to Minnesota following an audit.

"We are going to start very aggressively cracking down on the people and the organizations that are defrauding the American people," Vance said in a joint press conference with Oz.

Oz said CMS notified Minnesota that the federal government will release funds only after the state proposes and acts on a "comprehensive corrective action plan to solve the problem."

A spokesperson for Minnesota Governor Tim Walz did not immediately respond to a request for comment.

The announcement came after President Donald Trump, a Republican, tapped Vance to spearhead the administration's "war on fraud."

CMS said an audit and program integrity oversight identified "unusually high spending and rapid growth" in Minnesota's personal care services, home and community-based services and other practitioner services.

Oz said his agency could follow with similar actions in other states.

Minnesota "is not the only state that's floundering," Oz said. "We have more announcements with other states coming soon."

In addition to halting some Medicaid funding to Minnesota, CMS announced a six-month pause on adding new suppliers of durable medical equipment, prosthetics, orthotics and supplies. CMS said it halted more than $1.5 billion in suspected fraudulent billing in this area last year. 

Contributing: Reuters