WASHINGTON, Feb 25 - The U.S. administration announced on Wednesday that it has halted a portion of Medicaid funding to Minnesota after an audit uncovered concerns about the possible theft of federal funds designated for social-welfare programs in the state.
At a joint news conference, U.S. Vice President JD Vance confirmed the suspension and said the decision was part of the administration's broader effort to target fraud. Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz provided the specific figure involved, saying federal officials had paused payment of $259 million in deferred Medicaid payments to Minnesota following the audit.
On the timing and conditions of releasing the withheld funds, Oz said the federal government has informed Minnesota it will ultimately provide the money but will hold the payments until the state proposes and commits to a corrective course of action. As Oz put it:
"We have notified the state and that we will give them the money, but we’re going to hold it and only release it after they propose an act on a comprehensive corrective action plan to solve the problem," Oz said during a joint press conference with Vance.
The announcement followed a presidential decision to assign Vice President Vance to lead the administration's so-called "war on fraud." Officials framed the pause in payments as a step contingent on Minnesota producing a corrective plan that addresses the audit's findings.
Requests for immediate comment from Minnesota's governor's office went unanswered at the time of the announcement; a spokesperson for Governor Tim Walz did not immediately respond to a request for comment, according to officials at the press event.
The federal action places the onus on state authorities to outline and commit to specific remedial measures before receiving the deferred Medicaid funds. Administration officials said the funds would be returned once the corrective action plan is proposed and accepted under the terms described at the briefing.
Details from the audit that prompted the suspension were not disclosed in the briefing beyond references to concerns about theft of federal dollars intended for social-welfare programs. Officials tied the move to the administration's enforcement priorities but did not provide additional technical specifics or a timeline for review and release of the paused payments.
Summary of developments
- Federal officials paused $259 million in deferred Medicaid payments to Minnesota after an audit raised concerns about theft of federal social-welfare funds.
- The funds will be released only after Minnesota proposes a comprehensive corrective action plan acceptable to federal officials, officials said.
- A spokesperson for Governor Tim Walz did not immediately respond to requests for comment.