WASHINGTON, D.C. — Vice President JD Vance announced Wednesday that the Trump administration will temporarily withhold $259 million in Medicaid reimbursements to Minnesota as part of what President Donald Trump has called a federal “war on fraud.”
Speaking alongside Centers for Medicare & Medicaid Services Administrator Mehmet Oz, Vance said the administration is pausing payments tied to what officials describe as an ongoing fraud investigation involving day care centers in Minnesota. Oz said the reimbursement is based on a three-month audit conducted in late 2025 and that Gov. Tim Walz has 60 days to present a corrective action plan.
“We will give them the money, but we’re going to hold it,” Oz said, warning that deferred payments could reach $1 billion this year if issues are not addressed.
Vance said the administration is confident it has legal authority to withhold funds appropriated by Congress, arguing that the executive branch controls how federal money is distributed. “We shouldn’t be sending money to fraudsters,” he said.
Walz responded on X that the move “has nothing to do with fraud,” calling the cuts harmful to veterans, families and people with disabilities.
The dispute follows Trump’s State of the Union address, in which he pledged aggressive action to root out fraud across federal programs.
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