WASHINGTON, D.C. — The Department of Health and Human Services and the Centers for Medicare & Medicaid Services last week deferred more than $1 billion in federal Medicaid payments to California and Minnesota while reviewing claims the Trump administration says require additional documentation before matching federal funds are released.
The payment deferrals, totaling about $1.07 billion, are part of the administration’s broader effort to strengthen Medicaid oversight and prevent improper federal spending before payments are made.
California accounts for approximately $867.5 million of the deferred funds after CMS reviewed claims associated with certain in-home care programs and identified spending growth that exceeded national trends, along with other claims requiring further documentation.
Minnesota accounts for approximately $199 million following a CMS review of Medicaid claims across 14 service areas identified as higher risk. According to the agency, the review found claims requiring additional documentation, including expenditures tied to providers previously flagged through program integrity reviews and other claims with potential eligibility or billing concerns.
The administration emphasized that the actions are payment deferrals rather than permanent funding reductions. Both states will have an opportunity to submit documentation demonstrating the claims comply with federal Medicaid requirements before federal matching funds are released.
“States that receive federal Medicaid funding must demonstrate that every dollar meets federal requirements,” Health and Human Services Secretary Robert F. Kennedy Jr. stated. “When they cannot, we will not release federal funds until they do.”
CMS Administrator Dr. Mehmet Oz described the action as part of a shift toward preventing improper payments before they occur rather than attempting to recover funds afterward.
“CMS is done trying to chase down stolen and misused funds after they’ve already left the building,” Oz stated. “By stopping waste and fraud before the check clears, CMS is delivering record-high savings for taxpayers and ensuring that their hard-earned dollars reach the vulnerable Americans Medicaid is meant to serve.”
The department also said HHS and the HHS Office of Inspector General continue to use exclusion authorities to remove providers and other entities found to have engaged in fraud or abuse from participating in Medicare and Medicaid programs.
The payment reviews are part of the Trump administration’s broader initiative to strengthen Medicaid program integrity and increase scrutiny of federal healthcare spending before taxpayer funds are distributed.
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