Robert F. Kennedy Jr. announces the administration is deferring over $1 billion in Medicaid payments to California and Minnesota due to suspected fraud.
The administration announced on Tuesday that it is deferring more than $1 billion in Medicaid payments to California and Minnesota due to "suspected fraud and noncompliance." Health Secretary Robert F. Kennedy Jr. stated that the move is part of a proactive strategy to identify and stop waste before it occurs, rather than simply auditing past spending. The deferrals include $867.5 million for California and $199 million for Minnesota. Robert F. Kennedy Jr. noted that the government utilized AI and advanced analytics to pinpoint suspicious activity, particularly in California's home care programs. CMS Administrator Dr. Mehmet Oz emphasized that the government will no longer pay for services that "smell like fraud," such as providers billing for patients who have already passed away. While the administration seeks to save taxpayer money, state officials have offered mixed reactions. Minnesota's temporary commissioner, John Connolly, criticized the move as punitive, while California's Governor Gavin Newsom suggested the administration is targeting the state for political reasons. To recover the funds, the administration requires states to provide documentation proving the payments are legitimate.