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The Trump administration will pause more than $1 billion in Medicaid payments to California and Minnesota over suspicions of “fraud and noncompliance,” according to Health and Human Services Secretary Robert F. Kennedy Jr.
“If those states want that money, they need to provide documentation that these payments are legitimate,” Kennedy told reporters during a Tuesday morning press conference.
He said this included over $867 million for California and over $200 million for Minnesota.
Centers for Medicare and Medicaid Services (CMS) Administrator Dr. Mehmet Oz urged both states to cooperate with the agency.
“We want them to come alongside us, federal partners, to ensure that Medicaid dollars go to the services that are required by real people with real problems, getting real care,” he said. “…We have uncovered…in the past 18 months, billions of dollars have been stolen from the American people, taxpayers, and from patients, who often have lost their health, [and] their lives in these scandals.”
Oz said that when there were “signature and significant outliers, patterns that we’ve identified, anomalies that seem to happen again and again again, federal law mandates [and] requires us to pause that funding so that the states fix the problem.”
He said that agency reviews of California and Minnesota’s systems for the past few years have turned out the same almost every single quarter, “claims in the same high risk categories that the states have not yet been able to document fully and acceptably to the federal government, claims that are unresolved and claims that smell like fraud.”
Oz said a total of $1 billion would be deferred from both states until they can “substantiate their claims” from the last quarter’s audits.
In Minnesota, Oz drew attention to “high-risk service categories” like personal care or home-based services. “Roughly $413 million in claims were under review this quarter,” he said. The largest part of the scrutiny, Oz noted, was a new component. “Minnesota – and all 50 states – but Minnesota in particular, was asked to audit all that people providing services in these high-risk areas,” he said.
Minnesota disenrolled, he said, more than 3,000 providers as a result. These disenrolled providers were a “big part” of the $1 billion that CMS is deferring today, according to Oz.
And in California, over the past two fiscal years, Oz alleged that California’s spending for in-home healthcare programs spiked by 24 percent. “The rest of the country’s average is about 12 percent,” he said. “So California increased spending at twice the rate of the average of the rest of the entire nation. That doesn’t make sense.”
That gap, Oz said, accounts for about $391 million of CMS’s deferral.
