The Trump administration announced a freeze on more than $1 billion in federal Medicaid payments to California and Minnesota due to suspected fraud, Health and Human Services Secretary Robert F. Kennedy Jr. said Tuesday in a press conference [1, 2].
Kennedy stated, "We will not release these federal Medicaid funds until we are confident they are being used lawfully and appropriately" [1]. He added that if California Governor Gavin Newsom or Minnesota Governor Tim Walz want the funds released, they must provide documentation verifying that payments for low-income healthcare services are legitimate and not fraudulent, calling it "common sense" [3, 2].
About $867.5 million of the frozen Medicaid funds were allocated to California and approximately $199 million to Minnesota. The Centers for Medicare & Medicaid Services (CMS) flagged questionable claims related to in-home care services in both states and requested additional documentation for 14 service areas in Minnesota [4].
CMS Administrator Mehmet Oz emphasized a change in enforcement, saying, "CMS is done trying to chase down stolen and misused funds after they've already left the building," aiming to better protect taxpayer dollars [4].
This suspension is part of the Trump administration’s larger crackdown on government waste, fraud, and abuse of public funds, including tougher measures to remove bad actors from federal health programs and bar their return [1, 3, 5, 6, 7, 4]. Earlier this month, Deputy Attorney General Todd Blanche announced indictments against 455 individuals nationwide in Medicare fraud cases involving $6.5 billion [1, 3, 5, 6, 7].
The CMS first announced the deferral of $867.5 million in California and $199 million in Minnesota Medicaid funds on July 21, 2026, citing unsupported claims [4]. Now the HHS public announcement requires the governors of both states to prove the legality of their Medicaid expenditures before funds can be released [1, 2].
