Feds looking to audit all 50 states in Medicaid fraud crackdown

Trump administration has been criticized for focusing mostly on blue states

Dr. Mehmet Oz, administrator of the federal Centers for Medicare & Medicaid Services, speaks at the Department of Health and Human Services in Washington, D.C., in December. Oz said Tuesday that the Trump administration will require every state within 30 days to turn in a plan to revalidate the health care providers that participate in their Medicaid programs. (Alex Wong/Getty Images)

By Shalina Chatlani

Stateline

Dr. Mehmet Oz, the administrator of the federal Centers for Medicare & Medicaid Services, said Tuesday that the Trump administration will require every state within 30 days to turn in a plan to revalidate the health care providers that participate in their Medicaid programs.

The Trump administration has pledged to root out what it calls rampant fraud in state Medicaid programs. But thus far, it has focused almost exclusively on Democratic-led states, even though fraud involving government benefits isn’t any more prevalent in Democratic-led states than in Republican-led ones, according to federal data.

Oz said Tuesday that the administration will expand its Medicaid anti-fraud effort to all 50 states.

“We’re asking the states to own that problem… red and blue, all of them,” Oz said during a health care summit hosted by Politico. “If you don’t take it seriously, it indicates to us that we might have to take the audits… more aggressively,” he added.

In announcing earlier this month that Vice President JD Vance would lead the administration’s anti-fraud effort, President Donald Trump said on Truth Social that Vance would focus on fraud “‘EVERYWHERE,’ but primarily in those Blue States where CROOKED DEMOCRAT POLITICIANS, like those in California, Illinois, Minnesota (Somalia beware!), Maine, New York, and many others, have had a ‘free for all’ in the unprecedented theft of Taxpayer Money.”

During the interview with Politico, Oz said that his agency had already halted payments to about 450 hospices and home health care centers in Los Angeles. Oz also referred to the decision to hold back $259.5 million in federal Medicaid payments to Minnesota, noting that the state will have an opportunity “to go back and prove to us that they actually have the backup to some of the bills they’ve sent us.”

Andy Schneider, a research professor at the Georgetown University McCourt School of Public Policy, said he was pleased that Oz “did not use this forum to announce more deferrals against Minnesota or other states.”

“Perhaps he’s beginning to understand that withholding federal funds from states does not actually do anything to reduce fraud against Medicaid. Time will tell,” Schneider said.

Laith Quasem, a Seattle-based attorney at the Chapman Law Group who represents Medicaid and Medicare providers and suppliers in fraud cases, said many of his clients have been swept up in the California crackdown and have either had their payments suspended or been removed from the government programs.

“I truly believe CMS is really abusing its discretion right now, and they’re revoking and suspending, but asking questions later,” Quasem said.

“Some of it may certainly be well-founded. Under any administration there are always program integrity concerns,” he said. “But it’s not OK during a crackdown to just put providers out of business without a credible allegation of fraud.”

“Let’s say you’re a hospice, right? What do you do if you’re not getting paid? You’re not going to be able to keep the doors open,” he said. “What do you do with your patients?”

• Stateline reporter Shalina Chatlani can be reached at schatlani@stateline.org. Stateline is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.