Chicago – July 22, 2026
The Trump administration has suspended more than $1 billion in federal Medicaid payments to California and Minnesota, citing concerns over suspected fraud and noncompliance in state healthcare programs.
Health and Human Services Secretary Robert F. Kennedy Jr. announced the action on Tuesday alongside Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz, stating the funds would be released once states provide documentation proving the legitimacy of questioned claims.
The pause affects approximately $867.5 million in California Medicaid payments, primarily targeting in-home care programs that showed spending growth exceeding national trends. Minnesota faces a $199 million deferral covering 14 high-risk service areas previously flagged by the state’s own legislative auditor as vulnerable to fraud.
Administration officials emphasized the deferrals represent temporary pauses rather than permanent cuts, with no impact on beneficiary eligibility or services. States can recover the withheld funds by demonstrating claims meet federal requirements, with Minnesota already submitting documentation currently under CMS review.
The action marks the latest in a series of payment suspensions targeting predominantly Democratic-led states as part of what the White House has characterized as an “unrelenting” campaign against fraud in federal health programs.
