California’s $1.3B Medicaid funding put on hold amid fraud suspicions

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FILE-Protesters chant and hold signs outside of Rep. Young Kim's Anaheim Hills office to protest the recent reconciliation budget bill that they say could lead to billions of dollars of cuts to SNAP, Medicaid and other federal programs. (Allen J. Sch

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The Trump administration is taking new steps to eliminate fraud in federal health programs, including a $1.3 billion deferral in Medicaid funding to California.

Vice President JD Vance announced the initiative Wednesday amid the administration’s effort to impose a six-month freeze on some new Medicare enrollments, while admonishing states to probe Medicaid fraud or risk losing funding, officials told the Associated Press. 

RELATED: Dr. Oz launches 50-state review of Medicaid program oversight

According to the AP, these moves are part of Vance’s anti-fraud task force. The panel set up by President Donald Trump works to crack down on potential misuse of public money. 

Moreover, the Trump administration argues that its robust fraud-busting efforts will assist in preventing wrongdoing in Medicaid and Medicare to conserve funding and resources for those most in need. 

Postponing $1.3 billion in California payments

Dig deeper:

Dr. Mehmet Oz, who leads the Centers for Medicare and Medicaid Services, said the Trump administration was making the "largest deferral we've ever made" in Medicaid funds and that it was justified.

Oz asserts that the Trump administration identified questionable disbursements and aberrations, like a higher rate of growth in California's home care program compared with other states. 

RELATED: Judge orders RFK Jr.'s HHS department to stop sharing Medicaid data with DHS

According to the Associated Press, the press office of Gov. Gavin Newsom, D-Calif., disputed Oz's claims and said California’s home care program rose because the state is "keeping more people OUT of far more expensive nursing homes."

The AP noted that the total cost of California’s Medicaid program, including state and federal funding, is expected to be roughly $222 billion for the budget year that starts on July 1. 

Nationwide freeze on some new Medicare provider enrollments

Big picture view:

Dr. Mehmet Oz’s agency, the Centers for Medicare and Medicaid Services, aannounced a nationwide six-month moratorium on all new Medicare enrollments by providers of hospice and home care, according to the Associated Press. 

Some alleged fraud schemes were prosecuted in the hospice and home healthcare tiers, and states have admitted that it is a real concern. 

However, several states have pushed back on the Trump administration’s methods and raised concerns that the efforts could punish law-abiding providers that are attempting to serve patients. 

The Associated Press reported that the CMS has suspended payments to hundreds of hospices and home care agencies in Los Angeles over alleged fraud and issued another six-month moratorium on suppliers of medical equipment, prosthetics, and types of Medicare supplies.

Meanwhile, the Trump administration has approached five states with probes into possible healthcare fraud and ended some $243 million in Medicaid payments to Minnesota over fraud concerns. 

In April, Oz announced that CMS would add to that supervision by requiring all 50 states to disclose how they planned to revalidate some of their Medicaid providers.