WASHINGTON — The Trump administration announced Tuesday that it is deferring approximately $199 million in federal Medicaid payments to Minnesota as part of a broader review targeting suspected fraud and compliance issues.
Health and Human Services Secretary Robert F. Kennedy Jr. said Minnesota and California must provide documentation demonstrating that questioned Medicaid claims are legitimate before the federal government releases the withheld funding.
According to Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz, Minnesota’s review focuses on 14 Medicaid service areas previously identified by the state’s legislative auditor as being at high risk for fraud. Federal officials said roughly $413 million in Minnesota Medicaid claims were reviewed this quarter, with some claims allegedly involving documentation issues, billing after beneficiaries had died, and payments linked to providers flagged through fraud detection systems or removed from the program for compliance failures.
Oz said Minnesota has already submitted documents to CMS, and federal officials are reviewing the information to determine whether the deferred funding should be released.
Minnesota officials strongly disputed the administration’s actions. Gov. Tim Walz argued the move is aimed at reducing healthcare funding rather than combating fraud, while interim Department of Human Services Commissioner John Connolly said the state has cooperated with federal investigators and requested additional information explaining how the deferral amount was calculated.
The latest action marks the fourth Medicaid payment deferral announced for Minnesota in recent months as legal and administrative disputes between the state and the federal government continue.