The Centers for Medicare & Medicaid Services under the Donald Trump administration says it is intensifying oversight of state Medicaid programs as part of a broader effort to combat fraud in both Medicaid and Medicare. Officials signaled that more states may face federal scrutiny in the coming months as investigations expand. Mehmet Oz said the agency is taking a stricter approach, pointing to several states where federal officials believe fraud controls may be inadequate. He specifically named Minnesota, California, Maine, New York, and Florida as places where concerns have emerged.
The administration recently froze $259 million in Medicaid funding for Minnesota, prompting the state to file a federal lawsuit challenging the decision. State officials argue the freeze violates administrative procedures and oversteps congressional authority over federal spending. According to Minnesota leaders, the withheld amount equals roughly 7% of the state’s quarterly Medicaid funding and could lead to major service reductions if the dispute continues. Oz said he is reviewing the state’s legal claims but defended the federal action, arguing that evidence — including whistleblower reports — suggests Minnesota has not responded aggressively enough to fraud concerns. He said federal officials have a responsibility to protect taxpayer money and ensure health care funds are used properly.
JD Vance joined Oz last week in announcing that Minnesota’s funds would remain frozen until stronger anti-fraud measures are adopted.Meanwhile, Oz said he has sent a warning letter to Kathy Hochul, giving New York 30 days to explain its fraud detection efforts before possible federal action ⚖️📄. The conflict is expected to grow into a significant legal and political battle over federal authority in Medicaid oversight.
