Trump Administration Blocks More Than $200 Million in Medicaid Funds to Minnesota Amid Fraud Probe

Trump administration fraud-busters are taking aggressive action to clamp down on Minnesota’s wasteful ways.

The new effort was announced by Vice President J.D. Vance, Secretary of Health and Human Services Robert F. Kennedy Jr., and Administrator of the Centers for Medicare and Medicaid Services Dr. Mehmet Oz.

To ensure that more money does not goes where it should not after months of reports of fraud in Minnesota, $259.5 million of quarterly federal funding for Medicaid will be paused, according to a news release from the Centers for Medicaid and Medicare Services.

“For decades, Medicare fraud has drained billions from American taxpayers — that ends now,” Kennedy said.

“We are replacing the old ‘pay and chase’ model with a real-time ‘detect and deploy’ strategy, using advanced AI tools to identify fraud instantly and stop improper payments before they go out the door,” he said.

JD Vance: “I guarantee their are gonna be voices in the media and the state of Minnesota who say, ‘This is hurting children.’ No. It’s hurting fraudsters. The way to protect kids is to go after those fraudsters, which is what we’re doing.” pic.twitter.com/qD6E3QXuhH

— Aaron Rupar (@atrupar) February 25, 2026

“CMS is done trying to catch fraudsters with their hands in the cookie jar — instead, we’re padlocking the jar and letting them starve,” Oz said.

“This proactive approach will help us crush fraud, protect taxpayer dollars, and make sure the vulnerable Americans who depend on our programs get the care they need,” he continued.

The release noted that Minnesota was warned that without an effective corrective action plan to stop the kinds of fraud that has grabbed headlines for months, CMS would pause funding.

CMS found that in the fourth quarter of the last fiscal year, Minnesota wanted federal cash for $243.8 million in “unsupported or potentially fraudulent Medicaid claims,” according to the release, as well as $15.4 million in claims “involving individuals lacking a satisfactory immigration status.”

The Trump administration found potential fraud in areas such as personal care services and home and community-based services.

“Should Minnesota fail to clean up its significant program integrity vulnerabilities or demonstrate that the expenditures are allowable, CMS may defer more than $1 billion in federal funds over the next year,” the release said.

In the same release, CMS said it is putting in place a six-month national pause on claims for durable medical equipment, prosthetics, orthotics, and supplies after $1.5 billion in fraud was detected last year.

As noted by Roll Call, Trump touched on Minnesota’s vast network of fraud during his State of the Union speech on Tuesday.

In the speech, Trump vowed to attack corruption that is “plundering America.”

“There’s been no more stunning example than Minnesota, where members of the Somali community have pillaged an estimated $19 billion from the American taxpayer. We have all the information and, in actuality, the number is much higher than that,” Trump said.

“So, tonight, although started four months ago, I am officially announcing the war on fraud to be led by our great Vice President, J.D. Vance,” he added.

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