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HHS Defers More Than $1 Billion in Medicaid Payments to California, Minnesota Pending Review of High-Risk Claims in Crackdown on Fraud

WASHINGTON—JULY 21, 2026—The U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) today deferred more than $1 billion in federal Medicaid payments to California and Minnesota as the states submit additional documentation supporting certain high-risk Medicaid claims. The action advances the Trump administration’s effort to combat fraud, waste, and abuse in Medicaid and safeguard federal taxpayer dollars.

“Medicaid exists to serve vulnerable Americans — not to bankroll unsupported claims,” said HHS Secretary Robert F. Kennedy, Jr. “Under President Trump’s leadership, we are restoring accountability across our public programs and protecting taxpayer dollars. I appreciate CMS Administrator Dr. Oz’s leadership in strengthening Medicaid program integrity and ensuring federal funds are spent as Congress intended. States that receive federal Medicaid funding must demonstrate that every dollar meets federal requirements. When they cannot, we will not release federal funds until they do.”

CMS is deferring approximately $867.5 million in federal Medicaid payments to California and $199 million to Minnesota after focused financial reviews identified claims that require additional review before federal matching funds are released. These are payment deferrals (not permanent funding cuts) and both states will have the opportunity to provide documentation showing the claims meet federal Medicaid requirements.

Additionally, under Secretary Kennedy’s direction, HHS and the HHS Office of Inspector General continue to exercise exclusion authorities as a critical tool to remove bad actors from Medicare and Medicaid programs — and, in many cases, permanently bar them from returning.

“CMS is done trying to chase down stolen and misused funds after they’ve already left the building,” said CMS Administrator Dr. Mehmet Oz. “That’s why we’re deferring payments with respect to certain high-risk services within the Medicaid programs in California and Minnesota as part of our proactive new approach to program integrity. 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.”

CALIFORNIA
CMS reviewed California’s claims for certain in-home care programs after identifying spending growth that far exceeded national trends and other claims that require additional documentation. As a result, CMS is deferring approximately $867.5 million in federal Medicaid payments until the state provides the information needed to support those claims.

MINNESOTA
CMS also reviewed Medicaid claims in 14 high-risk service areas in Minnesota. The review identified claims that require additional documentation, including expenditures linked to providers flagged through program integrity reviews and other claims with potential eligibility or billing concerns. CMS is deferring approximately $199 million in federal Medicaid payments while that review continues.

The Trump administration is committed to rooting out fraud, waste, and abuse across the federal government. HHS will continue to aggressively protect taxpayer dollars and hold states accountable for every federal Medicaid dollar they spend

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