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Trump Administration Pauses More Than $1 Billion in Medicaid Payments to California, Minnesota

CMS said California and Minnesota must provide documentation before the frozen Medicaid funds are released, citing suspected fraud and billing concerns.

  • The Trump administration is pausing over $1 billion in federal Medicaid payments to California and Minnesota, citing concerns over "suspected fraud and noncompliance".
  • The hold includes $867.5 million for California and $199 million for Minnesota. Health and Human Services Secretary Robert F. Kennedy Jr. stated the funds are deferred, not permanently cut, and will be released if state officials provide sufficient documentation to substantiate the legitimacy of the claims.
  • Federal officials cited high-risk categories identified through advanced analytics and AI, specifically pointing to in-home care services, personal care facilities, and durable medical equipment as key areas showing abnormal spending growth or documentation gaps.
  • Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz framed the action as a proactive strategy shift aimed at preventing fraudulent disbursements before federal funds leave government hands.
  • The deferral builds on the White House Anti-Fraud Task Force's broader crackdown on federal health program spending, following previous Medicaid payment freezes in Minnesota earlier this year.
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The Trump administration will retain more than $1 billion in Medicaid payments to California and Minnesota after an audit revealed cases of fraud in the federal health program. Secretary of Health and Human Services Robert F. Kennedy Jr., and Centers for Medicare and Medicaid Services (CMS) administrator Mehmet Oz, announced Tuesday that they will postpone more than $800 million in funding for California and nearly $200 million for Minnesota.

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Trump administration says it's deferring $1B in Medicaid payments to California and Minnesota

The Trump administration says it's deferring over $1 billion in Medicaid payments to Minnesota and California because of suspected fraud and noncompliance.

·New York, United States
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Reuters broke the news in London, United Kingdom on Tuesday, July 21, 2026.
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