Vice President J.D. Vance announced Wednesday that the Trump administration would “temporarily suspend” some Medicaid funding to Minnesota over fraud concerns as part of an aggressive crackdown on the misuse of public funds.
Vance, who made the announcement with Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, said his administration took this step “to ensure that Minnesota takes seriously its obligation to be good stewards of the American people’s tax dollars.”
Oz called those committing fraud “selfish thugs” and said the federal government would withhold $259.5 million in Medicaid funding from Minnesota, the health care safety net for low-income Americans.
“This is not a problem for Minnesotans, it’s a problem for leaders in Minnesota and other states who don’t take Medicaid retention seriously,” Oz said.
Wednesday’s move is part of a larger effort by the Trump administration to focus on fraud across the country. The effort comes as fraud allegations involving a day care center run by Somali residents in Minneapolis sparked a major immigration crackdown in the Midwestern city and sparked widespread protests. President Donald Trump announced in Tuesday’s State of the Union address that Vance would lead the nation’s “war on fraud.”
President Trump recently nominated Colin McDonald to be the first assistant attorney general in charge of the Justice Department’s division dedicated to combating fraud.
Oz said the government notified Minnesota’s Democratic governor, Tim Walz, at the same time he made the announcement public. A message sent to Walz’s publicist was not immediately returned.
“We will give them the money, but we will withhold it and only release it once they have proposed and acted on a comprehensive corrective action plan to resolve the issue,” Oz said.
He said Walz would respond within 60 days and advised concerned providers and Medicaid recipients to contact Walz’s office.
There was no immediate response from a spokeswoman for Keith Ellison, the Minnesota attorney general who investigates Medicaid fraud. Earlier Wednesday, Ellison held a press conference promoting legislation that would give the office more staff and new legal tools to fight theft from programs.
Oz said the Centers for Medicare and Medicaid Services are also taking action to crack down on fraud in Medicare, the health care system that millions of seniors rely on.
He said CMS will block new Medicare enrollment for six months for suppliers of durable medical equipment, prosthetics, orthotics, and other supplies used to treat chronic diseases or support injury recovery.
Oz also announced a new crowdsourcing initiative that he says will help “fight fraud” by soliciting tips and suggestions from Americans.
“We’re all smarter than everyone else,” he said.
The administration has threatened in recent months to cut funding to various programs to some Democratic-run states, citing fraud concerns.
One judge blocked those measures and called for payments for various social welfare programs to be diverted to Minnesota and four other states: California, Colorado, Illinois, and New York. The government had said it had “reasons to believe” these states were illegally giving benefits to people in the country. The source of the information was not initially explained, but government lawyers told the judge it was primarily a response to reports about possible fraud.
Another judge said he would not cut off administrative funding to 22 states that have refused to turn over information about applicants and recipients of food assistance through the Supplemental Nutrition Assistance Program.
The move was prompted in part by a series of fraud cases involving the nonprofit organization Feeding Our Future, which was accused of stealing pandemic aid money meant for school meals. Prosecutors estimated losses from the incident at $300 million.
Since then, President Trump has targeted Minnesota’s Somali diaspora in an immigration crackdown and made a series of derogatory comments about the community. President Trump said in Tuesday’s State of the Union address that “pirates” had “plundered Minnesota.”
Federal agencies have also been asked to assist in the fraudulent activity in Minnesota.
Last December, the U.S. Treasury Department issued an order requiring money transfer services used to send money to Somalia to submit additional verification to the Treasury Department.
The Centers for Medicare and Medicaid Services announced in January that it intended to freeze some payments to Minnesota for some Medicaid programs deemed high-risk. The state filed an administrative appeal, saying those cuts would amount to more than $2 billion a year if they continued.
