Dr. Oz: CMS to Withhold $91M in Medicaid Funding in Minnesota Due to Fraud

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Today, CMS notified Governor Walz and the state of Minnesota that we are deferring an additional $91 million in federal Medicaid funding.

This follows a pattern we can’t ignore. From the “Learing Center” scandal to the recent DOJ action involving childcare centers, Minnesota’s Medicaid program has shown serious vulnerabilities to fraud. These are not isolated breakdowns—they point to systemic issues that must be addressed.

Here’s the reality: the federal government funds roughly half of Medicaid. That gives CMS both the authority and the responsibility to ensure those dollars are spent legally and appropriately. When they’re not, we act.

Earlier this year, after auditing Q4 FY2025 billing, we deferred over $250 million.

Of the $91 million deferred:
• $76 million is tied to 14 service categories highly vulnerable to fraud
• $14 million involves program integrity concerns, including payments for ineligible individuals

We’re giving Governor Walz as much support as we can to turn this around. However, we cannot and will not pay bad bills so we’re asking for more information from Minnesota to verify these bills.
CMS will continue using every tool available to protect Medicaid’s integrity—because this program must serve the most vulnerable Americans, while honoring the trust of taxpayers.
More updates to come.

As always, I’m grateful to @VP’s leadership as CMS plays its part in the whole-of-government effort to root out fraud.

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