MINNEAPOLIS (AP) 鈥� The Trump administration on Thursday notified Minnesota that it’s deferring an additional $91 million in Medicaid funding, due to fresh concerns about in state-run but federally funded social service programs.
The announcement from Dr. Mehmet Oz, administrator for the Centers for Medicare and Medicaid Services, cited on Tuesday at childcare and learning centers and other sites in the Minneapolis-St. Paul area that receive federal Medicaid funding.
鈥淢innesota state-run programs have raised serious red flags,鈥� Oz said in a video statement on social media.
called the action part of the Trump administration’s against Minnesota.
Vice President JD Vance notified Walz in February that CMS was $243 million because of the Democratic governor’s administration. Minnesota sued in response, warning it may have to cut healthcare for low-income families. A judge declined to grant a restraining order.
The deferral of $91 million comes in addition to the funds Vance said were being withheld earlier this year.
Of the latest tranche, $76 million is tied to 14 service categories that are considered highly vulnerable to fraud, Oz said. Another $14 million involves program integrity concerns, such as payments for ineligible individuals, including those who might be in the country illegally, he said.
Right-wing influencer Nick Shirley in December that said members of Minnesota鈥檚 large Somali community were running fake childcare centers to collect federal subsidies. The video caught the eye of the administration and conservative activists, though state inspectors . Oz cited the video Thursday.
Walz 鈥� the Democratic vice presidential nominee in 2024 鈥� in January, promising to devote his energy to fighting fraud rather than seeking a third term.
鈥淲hile Minnesota is working to stop fraud, the Trump Administration is working to exploit it,” Walz said in a statement. “This is a transparent effort to cut funding for the same working people and rural Minnesota hospitals they鈥檝e had in their crosshairs for months. Minnesota will not stand for this continued campaign of retribution.鈥�
But Oz said the action was about protecting taxpayer money.
鈥淭his isn鈥檛 about punishment, it’s about partnership and accountability,鈥� Oz said. 鈥淲e鈥檙e offering Minnesota the support they need to fix these problems. But at the same time, we cannot and will not pay claims that don鈥檛 meet federal standards. So we鈥檙e asking for additional documentation to verify these charges.鈥�
The Minnesota Department of Human Services, which administers Medicaid in the state, defended its record, saying it has been taking 鈥渁ggressive action鈥� for more than a year to stop fraud and recoup improper payments.
鈥淲e have been reporting to our federal partners and the public about those efforts,鈥� Commissioner Shireen Gandhi said in a statement. 鈥淲e are disappointed to learn that CMS will extend deferrals of needed funds for another quarter. Nonetheless, the department will continue to fight against the criminals who target Medicaid programs.鈥�
CMS approved the state鈥檚 corrective action plan in March but has yet to free up any of the $243 million it withheld earlier.
The announcement comes a week after Oz said CMS would to explain their plans to revalidate some of their Medicaid providers in an escalation of the Trump administration’s anti-fraud campaign.
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Associated Press reporter Ali Swenson in Washington, D.C., contributed.
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