Oz defers $91 million more in Minnesota Medicaid funding
Dr. Mehmet Oz said on Thursday that the Trump administration is deferring an additional $91 million in Minnesota Medicaid funding. The Minnesota action follows fresh federal concerns about fraud vulnerabilities in state-run social service programs.
Oz, the administrator for the Centers for Medicare and Medicaid Services, said state-run programs in minnesota had raised serious red flags. He said federal agents searched childcare and learning centers and other sites in the Minneapolis-St. Paul area on Tuesday.
Oz cites fraud concerns
Oz announced the deferral in a video statement on social media and said $76 million of the latest tranche is tied to 14 service categories considered highly vulnerable to fraud. Another $14 million involves program integrity concerns, including payments for ineligible individuals. He also cited payments for people who might be in the country illegally.
“Minnesota state-run programs have raised serious red flags,” Oz said. “This isn’t about punishment, it’s about partnership and accountability.” He added: “We’re offering Minnesota the support they need to fix these problems. But at the same time, we cannot and will not pay claims that don’t meet federal standards. So we’re asking for additional documentation to verify these charges.”
Walz and February withholding
The latest deferral adds to $243 million Vice President JD Vance said was temporarily withheld in February because of fraud concerns. Minnesota sued after that move and warned it might have to cut healthcare for low-income families. A judge declined to grant a restraining order in that case.
Gov. Tim Walz said, “While Minnesota is working to stop fraud, the Trump Administration is working to exploit it.” He also said, “This is a transparent effort to cut funding for the same working people and rural Minnesota hospitals they’ve had in their crosshairs for months. Minnesota will not stand for this continued campaign of retribution.”
December video claims
The February and Thursday actions follow a December video posted by right-wing influencer Nick Shirley, who said members of Minnesota’s Somali community were running fake childcare centers to collect federal subsidies. State inspectors discounted the allegations in that video.
The additional $91 million now sits on top of money already withheld earlier in the year, and the administration has tied the newest deferral to documentation it says Minnesota must provide to verify the claims. That leaves the state facing a deeper funding hold while the dispute over fraud, program integrity and federal payment standards continues.
