Vance Withholds $1.3 Billion in Calif. Medicaid Payment Pause
Vice President JD Vance announced Wednesday that the Trump administration is withholding $1.3 billion in Medicaid payments to California in the calif. medicaid payment pause tied to alleged fraud concerns. He said the administration is targeting the state because it is not taking fraud seriously, while California officials accused him of political targeting.
Vance said from the White House that “There are California taxpayers and American taxpayers who are being defrauded because California isn’t taking its program seriously, but also you have people who have been prescribed medications that they don’t even need. They’ve had drugs put into their bodies that they don’t need because fraudsters have actually encouraged false prescriptions and false administration of medications.”
Oz Flags California Records
Dr. Mehmet Oz said California’s Medicaid records “have generated major red flags for us,” and said the administration needs the state to explain $630 million in billing, $500 million in home health services, and $200 million in questionable expenditures linked to coverage for undocumented immigrants. Oz said the $1.3 billion suspension is the largest deferral the administration has ever made.
The administration is also notifying all 50 states that it could freeze funding to their Medicaid Fraud Control Units if they do not aggressively prosecute Medicaid fraud. Vance said the administration took a similar step in February, when it suspended Medicaid payments to Minnesota.
Newsom And Bonta Respond
California Gov. Gavin Newsom’s office criticized Vance and Oz after the announcement, and California Attorney General Rob Bonta said, “Once again, California appears to be targeted solely for political reasons.” The dispute leaves the state facing a federal payment suspension while CMS presses it for explanations on the billing and spending categories it singled out.
Oz also announced a six-month moratorium on new Medicare enrollment for hospices and home health agencies, adding another federal action aimed at providers in the same sector. California now faces both the payment hold and the demand to account for the spending lines CMS identified.
