The HHS Defers More Than $1B in Medicaid Payments to California, Minnesota

WASHINGTON—The Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) deferred more than $1 billion in federal Medicaid payments to California and Minnesota demanding the states submit additional documentation for some “high-risk” claims. 

CMS announced July 21 that it is deferring approximately $867.5 million in federal Medicaid payments to California and $199 million to Minnesota. CMS said the deferrals were made based on focused financial reviews identified claims that require additional review before federal matching funds are released. These payments are being deferred until both states provide documentation showing the claims meet federal Medicaid requirements.

“Medicaid exists to serve vulnerable Americans—not to bankroll unsupported claims,” said HHS Secretary Robert F. Kennedy, Jr. “Under President Trump’s leadership, we are restoring accountability across our public programs and protecting taxpayer dollars. I appreciate CMS Administrator Dr. Oz’s leadership in strengthening Medicaid program integrity and ensuring federal funds are spent as Congress intended. States that receive federal Medicaid funding must demonstrate that every dollar meets federal requirements. When they cannot, we will not release federal funds until they do.”

Additionally, HHS said it will be expanding its exclusion authority, enabling both CMS and the HHS Office of Inspector General to remove “bad actors” from federal healthcare programs—and, in many cases, permanently bar them from returning.

“CMS is done trying to chase down stolen and misused funds after they’ve already left the building,” said CMS Administrator Mehmet Oz. “That’s why we’re deferring payments with respect to certain high-risk services within the Medicaid programs in California and Minnesota as part of our proactive new approach to program integrity. By stopping waste and fraud before the check clears, CMS is delivering record-high savings for taxpayers and ensuring that their hard-earned dollars reach the vulnerable Americans Medicaid is meant to serve.”