Vice President JD Vance has warned that the government may withhold federal Medicaid funds from states that fail to crack down on Medicaid fraud. This comes as the Trump administration launches a crackdown on suspected fraud in state programs and defers $1.3 billion in Medicaid reimbursements from California.
The initiative came as people across the U.S. have expressed concern about increasing health costs and barriers to access, some of which come from the federal government’s own acts.
“We’re announcing that the federal government is deferring $1.3 billion in Medicaid reimbursements from the state of California. And the simple reason is because the state of California has not taken fraud very seriously. We want California to get serious about this fraud,” said Vance at news conference.
The vice president was joined by Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz and other officials, who all outlined new requirements for Medicaid programs in all 50 states, including showing aggressive prosecution of fraud or risk losing government funding for their anti-fraud units.
Dr. Oz referenced data from the White House Fraud Task Force on rapid growth in California’s hospice and home health sectors and described a “stunning level of suspected Medicaid and hospice fraud” uncovered in California, such as a 1,500% increase in hospice claims.
“In February, we had the largest anti-fraud announcement from CMS. Today’s effort is larger. It’s much larger, and there’s a reason for that. Half of the fraud, we believe, in the federal government, could be coming out of health care services,” said Oz.
Vance also singled out Hawaii and New York as potential targets for Medicaid fraud as they have not taken the fraud issue seriously.
Hellbound and Down 