California Governor Gavin Newsom criticized the Trump administration following its announcement that it's withholding more $867 million in Medicaid funds earmarked for California and $199 million for Minnesota due to fraud allegations.
The Trump administration said the money will remain frozen until the states submit documentation proving the payments are legitimate and free of fraud. Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. said the funds would only be released once both states provide the requested records.
Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz defended the move, describing it as a "very conservative" response. He argued the administration could have withheld substantially more funding but chose not to, saying officials "could have taken a lot more money" if they had wanted to.
The move had been brewing for some time.
Several weeks ago, as part of his role overseeing anti-fraud efforts, Vice President JD Vance said the administration is targeting California because state officials are not taking Medicaid fraud seriously enough.
Vance claimed both California and American taxpayers were being “defrauded” and alleged that some patients had been given unnecessary medications after fraudsters encouraged “false prescriptions” and improper treatment.
The administration’s action mirrors a similar move taken earlier this year against Minnesota, where Medicaid payments were suspended. Vance also warned that all 50 states could face cuts to funding for their Medicaid Fraud Control Units if they fail to “aggressively prosecute Medicaid fraud,” saying the administration is prepared to “turn off the money” to units that do not do their jobs.
All of this angered Newsom, who in a post on X from May 13 wrote:
"We hate fraud. But that’s NOT what this is. Vance and Oz are attacking programs that keep seniors and people with disabilities OUT of nursing homes. Pretty sick."
"Why has IHSS [In-Home Supportive Services] grown in California? It’s simple: Because California is keeping more people OUT of far more expensive nursing homes!"
On Tuesday, Newsom added:
"Today’s announcement from Dr. Oz is the same recycled political stunt we’ve seen before. California isn’t being targeted because Trump has evidence of fraud."
"We are being targeted for political reasons — and because Dr. Oz doesn’t understand that we are *SAVING* taxpayers money by keeping seniors and people with disabilities out of far more expensive nursing homes!"
"We hate fraud. That’s not what this is. And we stand ready to collaborate with CMS in good faith efforts to combat fraud."
You can see his post below.
Many have echoed Newsom's criticisms.
Meanwhile, Kennedy said the administration is using artificial intelligence, advanced data analytics, and conventional financial audits to detect questionable Medicaid spending. He added that states requesting federal Medicaid funds will be required to demonstrate that their expenditures comply with federal law before receiving additional money.
Oz previously addressed the administration’s decision to defer certain reimbursements to California, claiming the state’s Medicaid records had raised "major red flags." Oz said officials were seeking clarification over hundreds of millions of dollars in billing, including expenditures he alleged were connected to healthcare coverage for undocumented immigrants, despite undocumented immigrants not being eligible for Medicaid benefits.
Oddly, Vance said President Donald Trump "takes fraud seriously," which isn't very believable when you consider the number of times Trump has faced legal action for criminally fraudulent activities himself.
@thekalenallen/Threads
U.S. Mint
