The Trump administration is freezing $1.2 billion in federal Medicaid payments to California, its largest deferral yet as it targets the state’s in-home care program over fraud allegations.
Centers for Medicare & Medicaid Services Administrator Mehmet Oz announced the deferral Tuesday during an event with President Donald Trump.
CMS has already withheld an unprecedented sum — around $2.2 billion — from the state over the course of this year. Most of those funds were for California’s In-Home Supportive Services program, which compensates family members and other caregivers for helping patients with tasks like washing, dressing and feeding themselves.
The Trump administration alleges the program is riddled with fraud, pointing in part to the program’s rapid growth in recent years. California has protested the deferrals, saying the federal government hasn’t provided it with sufficient evidence of fraud and that growth is a function of ballooning demand.
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“California has been growing that program 24% in the last three years,” Oz said Tuesday. “That is twice the rate of every other state average in the country. Impossible for us to understand how that could be so.”
Oz also repeated a suggestion he’s made several times before: that the state is paying caregivers to provide services that family members would otherwise take care of.
“Many of you would carry groceries upstairs for your mom for free, I would think, but in California they’ll pay you a lot of money for it,” Oz said.
Neither CMS nor California state officials immediately responded to a request for comment.
The administration has made fighting fraud a central message ahead of the November midterm elections. Vice President JD Vance and members of his anti-fraud task force have touted actions in Medicaid, the individual health insurance marketplaces and the food stamp program, saying they’re shoring up federal safety programs for the Americans who qualify for them.
The funds deferred to California total around 4% of its annual federal payments for Medicaid, which is a program run by states and partially funded by the federal government.
Besides California, CMS has also deferred Medicaid payments to Minnesota over fraud allegations. The deferred funds are under review by CMS, which could decide to pay them or cancel them entirely. The states would be on the hook to make up any of those payments.
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