WASHINGTON, D.C. — The Trump administration paused more than $1 billion in federal Medicaid payments to California and Minnesota on Tuesday, demanding additional documentation for claims federal officials described as potentially fraudulent or unsupported.
The Centers for Medicare and Medicaid Services deferred approximately $867.5 million claimed by California and $199 million requested by Minnesota. Health and Human Services Secretary Robert F. Kennedy Jr. said the money has not been permanently withdrawn and could be released if state officials demonstrate that the services and expenses were legitimate.
Kennedy said questionable California claims were concentrated in home-based services. Minnesota’s deferred payments involve 14 program areas previously identified by the state legislative auditor as vulnerable to fraud, including personal care services, residential facilities and medical equipment.
CMS Administrator Mehmet Oz said the agency is using data analytics and artificial intelligence to flag unusual spending before federal reimbursements are issued. However, Kennedy and Oz did not publicly present evidence establishing that the specific claims were fraudulent.
The action expands an administration campaign targeting improper healthcare payments. Minnesota was already disputing earlier Medicaid deferrals, while California previously had approximately $1.3 billion placed under review. Payment deferrals can pressure state budgets because states may have already paid healthcare providers while awaiting federal reimbursement.
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