Vance Freezes California Medicaid Payments
Vice President JD Vance said Wednesday that the federal government is deferring $1.3 billion in Medicaid reimbursements from California. The announcement came alongside Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz, who said the move is part of a wider push to crack down on fraud in the system.
“We’re announcing that the federal government is deferring $1.3 billion in Medicaid reimbursements from the state of California,” Vance said.
He said the reason was simple. “And the simple reason is because the state of California has not taken fraud very seriously,” he said.
Dr. Oz said the administration believes a large share of hospice providers in the Los Angeles area are not legitimate.
“We believe that at least half of the hospices in the entire area around Los Angeles are fraudulent,” Dr. Oz said later in the press conference.
He also said the government has moved to suspend a major group of providers.
“Today, we announce 800 of those hospices have been suspended. 800 hospices that last year charged the federal taxpayer $1.4 billion will no longer be paid,” Dr. Oz added.
Fox News reported that Vance’s anti-fraud task force has withheld $1.4 billion in federal funding from home health and hospice providers nationwide. The report said the action follows a wave of suspensions aimed at operations in California, Minnesota, and several other states.
According to the report, about 90% of the suspended providers have not contacted CMS since payments were stopped. Trump administration officials told Fox News Digital that they see that silence as a sign the businesses may not have been real providers at all.
The report also said some of the suspended operations had been collecting federal money for years while not communicating with CMS. A senior Trump administration source told Fox News Digital that these providers had been “pocketing federal funds for years while failing to communicate with CMS.”
A spokesperson for Vance said the task force is trying to stop taxpayer money from reaching bad actors before the damage spreads.
“The vice president’s task force continues to stop the flow of taxpayer funds before they fall into the hands of fraudsters and deliver savings to the American people,” the spokesperson told Fox News Digital. “This is great momentum in the fight for the President’s War on Fraud.”
The move marks a major escalation in the administration’s effort to police Medicaid spending. It also puts a brighter spotlight on California’s role in the ongoing dispute over fraud controls, provider oversight, and where federal dollars are going.