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VP Vance, Dr. Oz hold ‘war on fraud’ probe
Vice President Vance and Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz hold an event on fraud while promoting their "war on fraud" agenda, saying some Medicaid funds could be withheld from Minnesota in the process.
MINNEAPOLIS (FOX 9) - Some Medicaid funding in Minnesota will be paused as the Trump administration addresses concerns over fraud, according to an announcement by Vice President J.D. Vance, who is set to spearhead a national "war on fraud."
President Trump spoke on fraud in Minnesota during his State of the Union speech Tuesday night, and previously cited it as a reason for the surge of immigration enforcement in the state.
JD Vance, Dr. Oz announce pause in MN Medicaid services
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Minnesota lawmakers clash over fraud prevention bills
Minnesota lawmakers are struggling to agree on fraud prevention measures. Democrats proposed 13 new bills focused on oversight and prevention. Republicans want an independent Office of Inspector General and transparency on fraud reports.
What they're saying:
The Vice President appeared at the podium with Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz to announce the temporary pause in federal funding.
Oz said the federal government will delay $259.5 million in Medicaid funding to Minnesota.
"This is not a problem with the people of Minnesota, it's a problem with the leadership of Minnesota and other states who do not take Medicaid preservation seriously," Oz said.
Oz said CMS will solicit tips and suggestions from citizens on ways to "crush fraud."
The other side:
Minnesota Governor Tim Walz shared the following response: "This has nothing to do with fraud. The agents Trump allegedly sent to investigate fraud are shooting protesters and arresting children. His DOJ is gutting the U.S. Attorney’s Office and crippling their ability to prosecute fraud. And every week Trump pardons another fraudster."
The Minnesota Department of Human Services said has been notified of the deferred $259 million in Medicaid funding and that it is already appealing a federal plan to withhold $2 billion in annual Medicaid funding to the state.
READ MORE: Minnesota appeals Trump admin pulling $2B in Medicaid funds over fraud
State officials also pointed out the Minnesota Department of Human Services implemented the following processes and reforms put forward since the fall of 2024, including:
- Identifying 14 Medicaid as high-risk, setting stricter controls on businesses such as criminal background checks on owners and authority to make unannounced site visits
- Discontinuing the Housing Stabilization Services program
- Auditing Autism Service providers, including onsite visits, and establishing licensing
- Establishing a temporary freeze on new businesses of the high-risk services
- Disenrolling inactive providers
- Beginning enhanced pre-payment review before fee-for-service payments are made to providers in high-risk services
- Conducting onsite visits of 5,800 providers of high-risk services by the end of May 2026
READ MORE: DHS Audit: $1 billion in Medicaid funding vulnerable to fraud
Minnesota Human Services Commissioner Shireen Gandhi shared the following statement:
"Today's announcement is part of a broad and sustained attack by the federal government on Medicaid in Minnesota. Deferring $259 million will significantly harm the state's health care infrastructure and the 1.2 million Minnesotans who depend on Medicaid. The federal government chose to ignore more than a year of serious and intensive work to fight fraud in our state."
What's next:
Oz said Gov. Walz has 60 days to respond, adding that concerned health care providers and Medicaid beneficiaries should contact the governor's office.
The CMS will crack down on fraud in Medicare, Oz said. Any new Medicare enrollments for suppliers of durable medical equipment, prosthetics, orthotics or other supplies used to treat chronic conditions or assist in injury recovery, will be blocked for six months.
Fraud in Minnesota
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Keith Ellison's proposal to fight fraud in MN: His full plan
Minnesota Attorney General Keith Ellison and state lawmakers are introducing a revised anti-fraud bill to crack down on Medicaid scammers.
Dig deeper:
DFL lawmakers and Minnesota Attorney General Kieth Ellison have shared their own plans for fraud prevention responses since the Feeding Our Future scandal in 2022. They also introduced a revised anti-fraud bill this week.
READ MORE: Feeding Our Future: 79th person charged
However, a new report looking at how Minnesota handled fraud found vulnerabilities dating back to the 1970s and inconsistent messaging from Department of Human Services leadership that encouraged "compassion over compliance" when it came to fraud prevention.
READ MORE: MN fraud report: Former workers say DHS put 'compassion over compliance' for fraud prevention
The report also raises concerns about a "too trusting mindset" within the state and a "system biased toward facilitating payments — rather than safeguarding funds" which officials say "contributed to creating opportunities for exploitation."
The Source: This story uses information taken from the Associated Press statements given by Vice President J.D. Vance.