Admin Pausing Some MN Medicaid Funding 02/26 06:12

   

   WASHINGTON (AP) -- Vice President JD Vance announced Wednesday that the 
Trump administration would "temporarily halt" some Medicaid funding to the 
state of Minnesota over fraud concerns, as part of what he described as an 
aggressive crackdown on misuse of public funds.

   Vance, who made the announcement with Dr. Mehmet Oz, the administrator for 
the Centers for Medicare and Medicaid Services, said the administration was 
taking the action "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, who referred to people committing fraud as "self-serving scoundrels," 
said the federal government would hold off on paying $259.5 million to 
Minnesota in funding for Medicaid, the health care safety net for low-income 
Americans.

   "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," Oz said.

   Wednesday's move is part of a larger Trump administration effort to 
spotlight fraud around the country. That effort comes after allegations of 
fraud involving day care centers run by Somali residents in Minneapolis 
prompted a massive immigration crackdown in the Midwestern city, resulting in 
widespread protests. President Donald Trump, in his State of the Union address 
on Tuesday, announced Vance would spearhead a national "war on fraud."

   Trump also recently nominated Colin McDonald to serve as the first assistant 
attorney general in charge of a Justice Department division dedicated to 
rooting out fraud.

   Minnesota pushes back

   Oz said the administration was simultaneously notifying Minnesota's 
Democratic Gov. Tim Walz as he was making the announcement publicly.

   "We will give them the money, but we're going to hold it and only release it 
after they propose and act on a comprehensive corrective action plan to solve 
the problem," Oz said.

   He said Walz would have 60 days to respond and advised health care providers 
and Medicaid beneficiaries who were concerned to contact Walz's office.

   Walz, former Vice President Kamala Harris' 2024 running mate, said in a pair 
of social media posts that the administration's move had nothing to do with 
fraud.

   "This is a campaign of retribution. Trump is weaponizing the entirety of the 
federal government to punish blue states like Minnesota," Walz said. "These 
cuts will be devastating for veterans, families with young kids, folks with 
disabilities, and working people across our state."

   Minnesota Attorney General Keith Ellison said in a statement that his team 
has secured over 300 Medicaid fraud convictions since he took office in 2019. 
And he noted that he called on the Legislature earlier Wednesday to give him 
more staff and new legal tools to combat Medicaid fraud.

   "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.

   Oz said the Centers for Medicare and Medicaid Services were also taking 
action to crack down on fraud in Medicare, the health care system relied upon 
by millions of older adults.

   He said CMS for six months would block any new Medicare enrollments for 
suppliers of durable medical equipment, prosthetics, orthotics or other 
supplies used to treat chronic conditions or assist in injury recovery.

   The Office of the Inspector General for the U.S. Department of Health and 
Human Services found last year that Medicare improperly paid suppliers nearly 
$23 million for durable medical equipment from 2018 through 2024. But it found 
that most of that was before January 2020, when changes to the system were 
implemented.

   Oz also announced a new crowdsourcing effort he said would help "crush 
fraud" by soliciting Americans' tips and suggestions.

   "All of us are smarter than any one of us," he said.

   In a news release accompanying the announcement, CMS said the funding being 
paused in Minnesota included some $244 million in unsupported or potentially 
fraudulent Medicaid claims and about $15 million in claims involving 
"individuals lacking a satisfactory immigration status."

   Immigrants who are not living in the U.S. legally, as well as some lawfully 
present immigrants, are not allowed to enroll in the Medicaid program that 
provides nearly-free coverage for health services.

   CMS said in the release that if Minnesota fails to satisfy its requirements, 
it may defer up to $1 billion in federal funds to the state over the next year. 
CMS spokesperson Catherine Howden said the agency's review of potential fraud 
cases would include sampling claims to see if they comply with federal 
requirements, and potentially requesting more information about specific claims.

   Akeiisa Coleman, the senior program officer for Medicaid at the Commonwealth 
Fund, said CMS was taking a "highly unusual step" in deferring funding. She 
said if the state doesn't have enough funds available, it may have to halt 
payments to providers, which could affect care.

   Democratic-run states face cutoffs

   The administration has threatened to cut off funding for various programs 
for some Democratic-run states over fraud concerns over the last few months.

   One judge blocked those actions and required that payments flowing to 
Minnesota and four other states -- California, Colorado, Illinois and New York 
-- for a variety of social service programs. The government had said that there 
was "reason to believe" that those states were granting benefits to people in 
the country illegally. It did not initially explain where that information came 
from, but a government lawyer told the judge it was largely in reaction to news 
reports about possible fraud.

   Another judge said she would not let it cut off funding for administrative 
costs for 22 states that have refused to hand over information about applicants 
and recipients of food aid through the Supplemental Nutritional Assistance 
Program.

   The latest action was prompted in part by a series of fraud cases, including 
a nonprofit called Feeding Our Future accused of stealing pandemic aid meant 
for school meals. Prosecutors have put the losses from that case at $300 
million.

   Since then, Trump has targeted the Somali diaspora in Minnesota with 
immigration enforcement actions and has made a series of disparaging comments 
about the community. During his State of the Union address on Tuesday, Trump 
said "pirates" have "ransacked Minnesota."

   Federal agencies have also been enlisted to assist in targeting fraud in 
Minnesota.

   Last December, the U.S. Treasury Department issued an order requiring money 
wire services that people use to send money to Somalia to submit additional 
verification to the Treasury.

   The Center for Medicare and Medicaid Services told Minnesota in January that 
it intended to freeze parts of payments for some Medicaid programs that were 
deemed high-risk. The state said that those cuts would add up to more than $2 
billion annually if they lasted and made an administrative appeal.