Feds freeze $1B to California, Minnesota Medicaid
The Department of Health and Human Services has placed a freeze on over $1 billion in Medicaid funding for California and Minnesota. Secretary Robert F. Kennedy Jr. announced the move on Tuesday, citing concerns over systemic fraud and documentation gaps in state programs. The administration withheld $867 million from California and $200 million from Minnesota.
Officials report that these states failed to adhere to the requirements of the program. According to the federal government, the decision followed an investigation that combined artificial intelligence with traditional financial reviews. This process uncovered significant billing issues in both states. Secretary Kennedy stated that the funds remain available to the states if they provide legitimate documentation to verify the services were provided to eligible beneficiaries.
Dr. Mehmet Oz, the administrator of the Centers for Medicare and Medicaid Services, highlighted specific discrepancies. In Minnesota, auditors found payment claims for services listed for deceased individuals and documentation failures across 14 high-risk programs. California faced scrutiny for a 24 percent spike in in-home service spending over two years. Federal officials noted that this rate is double the national average. Other identified issues in California include billing for patients after the service window closed and claims involving individuals with unclear immigration status.
Government administrators emphasized that these measures protect taxpayer resources. The goal is to ensure money reaches patients with genuine medical needs, such as children with complex conditions or veterans requiring home care. While Minnesota officials are currently working with the federal government to review their documentation, the issues in California are described as more complex and widespread.
Secretary Kennedy also announced a broader initiative to increase the department’s authority to exclude actors involved in fraudulent activity. This move signals a significant shift in federal oversight of state-managed Medicaid programs. Governors in the affected states must now produce verified records to secure the release of the frozen funds.