Robert F. Kennedy Jr., Department of Health and Human Services Secretary, announced that the Centers for Medicare and Medicaid (CMS) is pausing more than a billion dollars in Medicare and Medicaid funding to two states, California and Minnesota, in a press conference he held with other top administration officials Tuesday morning:
“CMS is pausing more than a billion dollars in federal Medicaid payments to California and to Minnesota because of suspected fraud and non-compliance. That includes more than $867 million for California and over $200 million for Minnesota.”
In order for Democrat Governors Newsom (D-Calif.) and Walz (D-Minn.) to have the funding unpaused, RFK Jr. explained that “all they have to do is provide basic documentation showing that these services are legitimate and not fraudulent.”
Governor Walz criticized the move on X, calling it a ploy to take away Americans’ healthcare benefits:
“This isn’t about fraud—it’s about cutting your healthcare so that Trump can afford the tax cuts he gave to billionaires.”
….
“They’re cutting more money in healthcare than they’ve prosecuted for fraud. The math doesn’t add up.”
CMS Director Dr. Mehmet Oz estimates that a total of $413 million in underreported Medicare and Medicaid claims have been identified in Minnesota alone. Oz also said that the majority of the $199 million paused funds relate to the amount claimed by providers that Minnesota disenrolled on suspicion of fraud, the quarter before they were disenrolled.
As for California, Oz raised concern over a 24% increase in California spending on in-home support services over the last two fiscal quarters, compared to a 12% increase nationwide, accounting for $391 million in paused funds. Another $250 million in claims were by providers deemed to have a high risk of fraud. Oz also alleged a widespread problem of claims involving illegal aliens, and $221 million were paused due to that concern.
Secretary Kennedy used this opportunity to highlight the Biden Administration’s lack of effective anti-fraud measures, explaining how it cut anti-fraud staff and paid suspected fraudsters:
“When Xavier Beccera came into this office, there were only 80 individuals involved in the program integrity program. By the time that I got in, there were only six; 74 of those were gone that is six individuals responsible for ensuring program integrity and guarding against fraud in 50 states and five territories. Even when they suspected fraud, the Biden HHS sent checks anyway and tried to claw back the money later. It didn't make sense and it didn't work. The scammers got paid. The taxpayers got stuck with these enormous bills.”
Federal Trade Commission (FTC) Chairman Andrew Ferguson reiterated many of the concerns about fraud’s effect on social trust he previously leveled at anti-fraud roundtables:
“Our society has disintegrated from the high trust society that it has been. And the only way that we can restore that high trust is to make sure that the money stays in the agencies or goes to people who actually need it – and if you get money fraudulently, you go to jail.
“And that is what this is this anti-fraud effort is about. Not just protecting the fisc. It is restoring an America. It is making America great by making sure that the social trust that a self-governing democracy to survives can be restored.”
