Trump Administration Freezes $259 Million in Minnesota Medicaid Funds Over Fraud Claims [Video]

Federal health funding to Minnesota is on hold after the White House announced a temporary freeze tied to alleged Medicaid fraud.

Video

JD Vance said Wednesday that the administration is pausing portions of the state’s Medicaid payments while federal officials review questionable claims. Standing alongside Mehmet Oz, who leads the Centers for Medicare & Medicaid Services, Vance framed the move as part of a broader effort championed by Donald Trump to crack down on misuse of public funds.

According to CMS, $259.5 million in federal Medicaid dollars will be withheld for now. The agency said the figure includes roughly $244 million in unsupported or potentially fraudulent claims and about $15 million tied to claims involving “individuals lacking a satisfactory immigration status.”

Vance said the funding pause is necessary “in order to ensure that the state of Minnesota takes its obligations seriously to be good stewards of the American people’s tax money.”

Oz took sharper aim at those accused of wrongdoing, calling them “self-serving scoundrels.” He added, “This is not a problem with the people of Minnesota, it’s a problem with the leadership of Minnesota and other states who do not take Medicaid preservation seriously.”

The administration said Minnesota will have 60 days to submit a corrective action plan before funds are released.

Governor Tim Walz pushed back, writing on social media, “This is a campaign of retribution. Trump is weaponizing the entirety of the federal government to punish blue states like Minnesota.” He added, “These cuts will be devastating for veterans, families with young kids, folks with disabilities, and working people across our state.”

Attorney General Keith Ellison said his office has secured more than 300 Medicaid fraud convictions since 2019.

“Courts have repeatedly found that their pattern of cutting first and asking questions later is illegal, and if the federal government is unlawfully withholding money meant for the 1.2 million low-income Minnesotans on Medicaid, we will see them in court,” Ellison said.

CMS also confirmed it will temporarily block new Medicare enrollments for certain medical equipment suppliers following findings from the U.S. Department of Health and Human Services inspector general that Medicare improperly paid nearly $23 million between 2018 and 2024.

Akeiisa Coleman of the Commonwealth Fund called the funding delay a “highly unusual step,” warning it could disrupt provider payments if the state cannot cover the gap.