Trump administration defers more Medicaid funding to Minnesota after FBI raids
Published in News & Features
The federal government is deferring more Medicaid funding to Minnesota days after the FBI raided autism and child care sites across the Twin Cities amid ongoing probes into social services fraud.
Dr. Mehmet Oz, the administrator of the Centers for Medicare and Medicaid Services, said on X that his agency told Gov. Tim Walz on Thursday that it’s deferring an additional $91 million in federal Medicaid funding to the state.
Oz’s announcement is the latest federal response to a local fraud scandal that’s thrust Minnesota into the national spotlight — and jeopardized essential social services for thousands of vulnerable residents.
“Minnesota state-run programs have raised serious red flags,” Oz said in a video. He added without evidence or elaboration that a recent audit of Minnesota Medicaid billing found millions of dollars went to “illegal immigrants who weren’t supposed to be getting this coverage.”
In a statement, Walz accused the Trump administration of exploiting social services fraud that he said he’s working to stop.
“This is a transparent effort to cut funding for the same working people and rural Minnesota hospitals they’ve had in their cross-hairs for months,” he said. “Minnesota will not stand for this continued campaign of retribution.”
For months, the Trump administration has trained its focus on Minnesota after several people were charged with defrauding programs meant to help residents with everything from autism to housing. Federal officials cited social services fraud as a reason to deploy thousands of agents to the state for the massive immigration enforcement campaign earlier this year.
News of the latest Medicaid funding freeze comes months after an earlier threat sent many lawful providers scrambling to stay afloat.
In February, federal officials announced they would halt $259 million in Medicaid funding to Minnesota over concerns about fraud.
Attorney General Keith Ellison sued CMS and the U.S. Department of Health and Human Services to stop the freeze, and the federal government in March approved a state plan to improve oversight. But earlier this month, a federal court denied Minnesota’s request to block the Trump administration from deferring the quarter-billion dollar sum, deepening anxiety among providers that services could further contract.
In a statement, Department of Human Services Commissioner Shireen Gandhi pointed to the state agency’s recent efforts to crack down on fraud and condemned news of additional payments deferrals.
“We are disappointed to learn that CMS will extend deferrals of needed funds for another quarter,” Gandhi said. “Nonetheless, the department will continue to fight against the criminals who target Medicaid programs.”
In the video, Oz asked Minnesota leaders to provide “additional documentation to verify these charges.” He also mentioned the recent raids “tied to child care billing concerns.”
On April 28, federal and state agents fanned out at sites across the Twin Cities after a monthslong lull in public developments in the fraud investigations.
The state Attorney General’s Office said agents searched five locations of four metro-area autism providers and numerous child care centers.
But the 22 search warrant affidavits remain sealed, and no charges have been filed. That leaves the names and leaders of the majority of the raided providers unknown. It’s unclear whether other programs besides child care and autism were targeted.
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