Chicago – May 15, 2026
Vice President JD Vance announced Wednesday that the Trump administration is withholding $1.3 billion in Medicaid payments to California and is threatening to suspend federal funding to all states if they don’t aggressively prosecute fraud in their Medicaid programs.
As part of his role as the fraud czar, Vance said that the administration is targeting California because the state isn’t taking fraud seriously.
“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,” Vance said at the White House.
The move is similar to the one the administration took in February suspending Medicaid payments to Minnesota.
Vance said that 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.” The units, which exist in each state, investigate and prosecute Medicaid provider fraud. “We are going to turn off the money that goes to these anti-fraud units,” he said, if they fail to do their job.
He also warned, “And if we continue to find problems, we can turn off other resources within their state Medicaid programs as well.”
