Medicaid deferral – JD Vance said the Trump administration will defer $1.3B in Medicaid payments to California over fraud concerns, prompting sharp pushback from state officials.
A sharp showdown over federal healthcare spending is unfolding in Washington and California after Vice President JD Vance said the Trump administration is deferring $1.3 billion in Medicaid reimbursements to the state. citing concerns that fraud and unnecessary prescribing are driving up costs for taxpayers.
Speaking Wednesday. Vance argued that “fraudsters” in California are inflating expenses and harming patients. including by steering people toward medications they do not need.. He said the alleged conduct includes false prescriptions and inappropriate administration of drugs. while contrasting what he described as the impact on both California residents and “American taxpayers.”
Vance made the remarks alongside Dr.. Mehmet Oz, who leads the Centers for Medicare and Medicaid Services.. Oz used the opportunity to broaden the administration’s focus. saying fraud is widespread in hospice services and certain in-home care programs across the country. with particular emphasis on the Los Angeles region.
Oz announced a six-month moratorium on new Medicare enrollment for hospices and home health agencies. arguing that the scale of hospice-related activity in the Los Angeles area is not consistent with the region’s underlying death rates.. He said the administration and other officials concluded that at least half of hospices around Los Angeles are fraudulent. and he pointed to action taken the previous year to shut down 800 hospices that had billed the federal government $1.4 billion.. He also said those numbers represent a major jump compared with the roughly 450 providers the administration had reported suspending as of last month.
The administration’s latest push is the most recent effort to spotlight and rein in alleged fraud across federal healthcare benefit programs, particularly in states led by Democrats. In California, the response was immediate and forceful.
Gov.. Gavin Newsom’s office rejected the premise of the action. stating that while it opposes fraud. the administration’s approach is misdirected.. The office said Vance and Oz were attacking programs that. in its view. help keep seniors and people with disabilities out of nursing homes.. On social media. Newsom’s office framed the federal move as damaging access to care and argued that the programs being targeted are meant to support people living at home rather than forcing transfers to more expensive institutional settings.
California’s dispute centered on In-Home Supportive Services. which Newsom’s office said has expanded because it helps people avoid far costlier nursing home care.. The services described by the state include assistants who support daily tasks such as bathing. laundry. and cooking. as well as help with medically directed needs like injections under a medical professional’s instruction.. The office also said caregivers help people get to and from appointments.
Newsom’s office cited figures from a 2020 report by the California state auditor. saying nearly three-quarters of IHSS caregivers assist a family member.. It also compared reported annual costs—asserting IHSS care costs about $30. 000 per person while nursing home care costs about $137. 000—claiming that the difference translates into substantial taxpayer savings per person.
California’s top legal officer echoed the criticism.. Attorney General Rob Bonta said the administration appeared to be targeting the state for political reasons. and he argued that the deferred funds involve Medicaid money for vital programs that keep seniors and people with disabilities safely at home.. Bonta said his team was reviewing available information and that the state would challenge unlawful actions if Californians’ rights or access to critical services were threatened.
Democratic Sen. Alex Padilla also attacked the move, saying the administration was punishing California over fraud claims it said cannot be substantiated. In his remarks on social media, Padilla characterized the action as political retribution rather than a genuine attempt to curb fraud.
The fight over fraud allegations is not new in California’s hospice sector.. Authorities in the state previously promised a crackdown after a late-2020 investigation revealed that some providers were billing Medicare for hospice services and related equipment even though patients were not actually dying.. That reporting was paired with claims that the hospice industry in California had grown rapidly, raising scrutiny of billing practices.
California’s Medicaid program. known as Medi-Cal. is projected to cost about $222 billion for the budget year beginning July 1. according to the figures cited in the state’s broader planning context.. More than a third of California’s population—roughly 15 million people—are enrolled in Medi-Cal. a scale that makes federal reimbursement disputes particularly consequential for state health operations.
Vance. who was named by President Trump as a “fraud czar” last month and has described healthcare fraud as a central focus. has traveled around the country to argue the administration is taking steps to bring down healthcare costs by identifying waste. fraud. and abuse.. He has said waste and abuse are prevalent especially in Democratic-led states such as California, New York, and Minnesota.
On Wednesday. Vance also threatened to cut off what he described as billions in federal funding for state-run fraud control units—teams intended to prosecute people who abuse the system.. He said those units are not doing enough. arguing that the administration wants states to use the tools available. but that federal efforts cannot succeed if states are not willing to act.
The fraud crackdown is unfolding amid wider political arguments about healthcare spending and access.. Critics of the Trump administration have pointed to other changes they say have contributed to higher costs or made it harder for people to obtain healthcare. including cuts to Obamacare subsidies and new work requirements in Medicaid.. Those changes. according to the concerns raised in the debate described Wednesday. could strain hospitals and have contributed to millions losing coverage.
In recent months, disputes between the administration and California leaders have taken multiple forms.. In January. Newsom filed a civil rights complaint against Oz after Oz posted a video accusing Armenian crime groups of engaging in widespread healthcare fraud in Los Angeles.. Newsom’s office said the claims were “baseless and racist. ” underscoring the political and personal stakes both sides say are involved.
Wednesday’s actions also build on prior federal investigations into potential healthcare fraud in multiple states. including California. Florida. Maine. Minnesota. and New York.. The administration previously halted about $243 million in Medicaid payments to Minnesota over fraud concerns. and the Centers for Medicare and Medicaid Services has acknowledged using incorrect figures to justify a fraud probe in New York—an admission that has added to concerns about how the administration identifies problematic activity.
Vance dismissed the criticism that the California move is retribution. saying it is meant to serve as a warning and to prompt states to confront fraud with seriousness.. He said the administration does not want to permanently “turn off” money. arguing instead for stronger enforcement and improved detection. including through new technologies—while insisting the federal government cannot solve the problem alone if states do not take action.
“We don’t want to turn off any money. ” Vance said. while arguing that fraud enforcement is necessary to protect both Medicaid and Medicare.. He said the administration’s focus is to ensure people responsible for administering programs treat fraud as a priority. warning that federal programs cannot be protected if states are allowing them to be exploited by fraudsters.
JD Vance Medicaid fraud California Medi-Cal hospice moratorium CMS Oz Medicare payments
Dr Oz is in charge of Medicare now?? since when
so they just not gonna pay California at all?? my mom is on Medicaid and she already has trouble getting her prescriptions covered this is gonna make it so much worse for regular people who actually need it, the fraud stuff sounds made up to me
this is honestly what happens when you let one state have like 40 million people on government healthcare and nobody checks anything for years and years, california has been doing this forever and i remember hearing about medicaid fraud out there back when i was living in nevada like 2015 or 2016 and nothing ever got done about it, vance is finally saying something but honestly the whole system is broken not just california, my cousin works in a clinic in arizona and she says the amount of fake billing that goes on is insane, they bill for stuff that never even happened and nobody audits it, so yeah i dont think this is just a california problem but at the same time 1.3 billion is a lot and if its fraud then yeah take it back i guess, just hope real sick people dont suffer because of it
wait so they cutting medicaid because california voted democrat, lets be real thats what this actually is, fraud is just the excuse they always use