Trump administration pauses Medicaid payments to Minnesota, California

The Trump administration on Tuesday paused more than $1 billion in Medicaid payments to California and Minnesota, which Health and Human Services Secretary Robert F. Kennedy Jr. said would not be reversed until the Democratic-led states "demonstrate that every dollar meets federal requirements."

"If those states want that money, they need to provide documentations that these payments are legitimate," Kennedy said at a news conference announcing the HHS action, which he said was a means of preventing the waste of taxpayer dollars.

The Centers for Medicare & Medicaid Services will defer approximately $867.5 million in federal Medicaid payments to California and $199 million to Minnesota, according to a news release announcing the moratorium, which billed the pause as an effort to advance "the Trump administration's effort to combat fraud, waste, and abuse in Medicaid and safeguard federal taxpayer dollars."

Kennedy named Democratic Govs. Gavin Newsom of California and Tim Walz of Minnesota during the news conference, who have both been consistent targets of the Trump administration, saying that "all they have to do is provide basic documentation showing that these services are legitimate and not fraudulent, and that's common sense."

CMS Administrator Mehmet Oz, who was also present at Tuesday's news conference, said that the two states have not documented Medicaid claims "fully and acceptably to the federal government," adding that a federal review of the states' low-cost health insurance payouts in recent years turned up "claims that smell like fraud," although he did not provide specific evidence of alleged fraud.

"This isn't about fraud — it's about cutting your healthcare so that Trump can afford the tax cuts he gave to billionaires," Walz said in a statement posted to social media after the announcement. "They're cutting more money in healthcare than they've prosecuted for fraud. The math doesn't add up."

The payment pause comes as the latest in a series of payment suspensions directed largely at blue states that have come as part of the White House's antifraud push that Vice President JD Vance is leading. The Trump administration previously stopped millions of federal funds from reaching Minnesota in February after allegations of widespread fraud within the state's public assistance programs led to a sprawling Justice Department investigation. Walz called the earlier funding freeze a "campaign of retribution."

Oz said Minnesota's questionable claims are across more than a dozen service categories that are "vulnerable" to fraud, while Kennedy said the concern in California centers on potential fraud in at-home service claims. Neither official provided evidence to substantiate those claims.

Newsom decried the announcement as "the same recycled political stunt we've seen before" in a statement posted to X. "California isn't being targeted because Trump has evidence of fraud. We are being targeted for political reasons — and because Dr. Oz doesn't understand that we are *SAVING* taxpayers money by keeping seniors and people with disabilities out of far more expensive nursing homes!" Newsom wrote, adding that his state stands "ready to collaborate with CMS in good faith efforts to combat fraud."