Here's a classic Washington move: announce you're cutting off someone's money, call it "temporary," and then watch the political fireworks. That's what happened Wednesday when Vice President JD Vance and Dr. Mehmet Oz, the administrator for the Centers for Medicare & Medicaid Services (CMS), said they would "temporarily halt" $259.5 million in Medicaid funding to Minnesota. The reason? A crackdown on what they say is misuse of public funds.
Dr. Oz laid out the specifics. CMS will suspend new Medicare enrollments for six months for suppliers of durable medical equipment, prosthetics, orthotics, and related supplies in the state. He also announced a crowdsourcing initiative to fight fraud by inviting tips from the public. The message was clear: the federal government is getting serious about watching where its money goes.
But here's the catch—the halt is "temporary." Oz said the funding would be restored once Minnesota submits and carries out a comprehensive corrective action plan. Governor Tim Walz has 60 days to respond. "This is not a problem with the people of Minnesota, it's a problem with the leadership of Minnesota and other states who do not take Medicaid preservation seriously," Oz stated.
This isn't the first warning shot. Back in January, CMS told Minnesota it planned to freeze portions of funding for certain high-risk Medicaid programs. The state estimated those cuts could total more than $2 billion a year if sustained and has already filed an administrative appeal. So this new $260 million pause is essentially adding fuel to an existing fire.
Governor Walz didn't wait long to fight back. He took to social media with a blunt response: "This has nothing to do with fraud." He added, "Every week Trump pardons another fraudster." In another post, he called the move "a campaign of retribution" and warned the cuts would be "devastating" for people in his state, particularly veterans and people with disabilities.
The Broader 'War on Fraud'
So why Minnesota, and why now? To understand that, you have to look at the bigger picture. In his State of the Union address on Tuesday, President Donald Trump declared a national "war on fraud," with Vance spearheading the campaign. The administration has also nominated Colin McDonald as the inaugural assistant attorney general to head a new Justice Department division dedicated to combating fraud.
Minnesota has found itself in the crosshairs amid specific allegations. The administration has focused on fraud allegations tied to day care centers run by Somali residents in Minneapolis, which triggered a sweeping immigration crackdown in the city and sparked widespread protests. Meanwhile, a nonprofit in Minnesota called Feeding Our Future has been accused of misappropriating pandemic relief funds intended for school meal programs, with prosecutors estimating losses at a staggering $300 million.
It's a messy situation where allegations of fraud, immigration policy, and the use of federal funds all collide. The administration is framing it as a necessary crackdown on waste and abuse. State leaders see it as a politically motivated attack.
