Feds defer additional $91 million in Minnesota Medicaid funds; Gov. Walz calls it “campaign of retribution”
Gov. Tim Walz says the Trump administration is exploiting the state’s fraud disaster after Dr. Mehmet Oz, administrator for the Centers for Medicare & Medicaid Services, introduced an additional $91 million in federal Medicaid funding is being deferred, citing ongoing issues about fraud and program vulnerabilities.
“This is a transparent effort to cut funding for the same working people and rural Minnesota hospitals they’ve had in their crosshairs for months. Minnesota will not stand for this continued campaign of retribution,” Walz stated Thursday. “Minnesota is working to stop fraud.”
In a tweet posted earlier Thursday afternoonOz stated the brand new deferral follows a “pattern we can’t ignore” of points in Minnesota’s Medicaid program. Oz referenced earlier incidents, such as the “Learning Center” brouhaha and up to date Department of Justice actions involving childcare facilities, claiming that these weren’t remoted breakdowns.
According to Oz, of the $91 million now being held, $76 million is tied to 14 service classes he recognized as “highly vulnerable” to fraud.
“We cannot and will not pay bad bills, so we’re asking for more information from Minnesota to verify these bills,” Oz stated. He added that CMS will proceed to make use of all accessible instruments to guard the integrity of the Medicaid program.
Earlier this 12 months, CMS deferred over $260 million in Medicaid funding to Minnesota after auditing fourth-quarter fiscal 12 months 2025 billing. Oz stated the federal authorities funds roughly half of Medicaid and has each the authority and duty to make sure these {dollars} are spent legally and appropriately.
Minnesota Human Services Commissioner Shireen Gandhi stated, “For more than a year, the Minnesota Department of Human Services has been taking aggressive action to both prevent fraud and recover fraudulent payments. We have been reporting to our federal partners and the public about those efforts. We are disappointed to learn that CMS will extend deferrals of needed funds for another quarter. Regardless, the department will continue to fight against the criminals who target Medicaid programs.”
The newest federal motion comes as Minnesota’s healthcare system faces mounting financial strain. According to the Minnesota Hospital Association, 30% of hospitals in the state are dropping hundreds of thousands of {dollars} every year.
Separately, the Minnesota Senate on Wednesday earmarked tons of of hundreds of thousands of {dollars} to stabilize hospitals throughout the state facing financial struggles, especially with some looming federal changes coming to Medicaid underneath the so-called “One Big Beautiful” invoice.
That plan, and what handed the Senate Wednesday, nonetheless must clear the tied Minnesota House. Legislative leaders have begun end-of-session negotiations forward of the constitutional final day on May 18.
Oz stated the Centers for Medicare & Medicaid Services will proceed to work with Minnesota officers to deal with the recognized vulnerabilities, however emphasised that federal funding is not going to be restored till the state can reveal that Medicaid {dollars} are being spent appropriately.
