The Trump administration, in the form of Vice President J.D. Vance and the Centers for Medicare & Medicaid Services (CMS), announced a crackdown on fraud today. Vance, who holds the unofficial title of fraud czar, announced that $1.3 billion in Medicaid funds would be withheld from California.
Vice President JD Vance announced Wednesday that the Trump administration is withholding $1.3 billion in Medicaid payments to California and is threatening to suspend federal funding to all states if they don’t aggressively prosecute fraud in their Medicaid programs.
As part of his role as the fraud czar, Vance said that the administration is targeting California because the state isn’t taking fraud seriously.
“There are California taxpayers and American taxpayers who are being defrauded because California isn’t taking its program seriously, but also you have people who have been prescribed medications that they don’t even need. They’ve had drugs put into their bodies that they don’t need because fraudsters have actually encouraged false prescriptions and false administration of medications,” Vance said at the White House.
This is not the first time the administration has clamped down on a state like this. In February, Vance announced similar action in the state of Minnesota.
Vance, joined by Centers for Medicare & Medicaid Services Administrator Mehmet Oz, announced the opening salvo in the effort Wednesday: a pause on federal Medicaid reimbursements to Minnesota. The state is subject to an ongoing fraud probe involving day care centers and allegations of misuse of funds that has become a rallying cause for Republicans.
“We have decided to temporarily halt certain amounts of Medicaid funding that are going to the state of Minnesota in order to ensure that the state of Minnesota takes its obligation seriously to be good stewards of the American people’s tax money,” Vance said at an afternoon news conference.
I've watched a bit of Vance's speech and he made the case that the reason the Trump administration is cracking down on states nationwide is to pressure them into taking the issue of fraud more seriously. Each state, Vance explained, has an office that investigates fraud. Today, letters are going out to all 50 states asking for evidence that they are prosecuting fraud. Any state that can't show it is doing that is going to have its funds turned off.
Vance offered a few examples, noting that the state of Hawaii has not prosecuted a single case of Medicaid fraud in the past year. He also noted that New York, which gets $100 billion in Medicaid money every year, has only had 9 prosecutions over the past year.
Also today, CMS announced it was creating a 6-month moratorium on new hospice and home health agencies.
In coordination with Vice President JD Vance’s Anti-Fraud Task Force, the Centers for Medicare & Medicaid Services (CMS) is taking decisive action to protect Medicare beneficiaries and taxpayer dollars through implementation of a six-month, nationwide data-driven moratoria on new Medicare enrollment for hospices and home health agencies (HHAs). The moratoria will allow CMS to temporarily halt the influx of new providers into these high-risk categories—a key source of fraudulent activity. Today’s move continues the Trump Administration’s crackdown on fraud, waste, and abuse in the Medicare program by stopping improper billing and preventing bad actors from entering the system.
“We’ve seen systemic and deeply troubling fraud in the hospice and home health space, with bad actors exploiting some of our most vulnerable Medicare patients and stealing money from the American taxpayer,” said CMS Administrator Dr. Mehmet Oz. “Today we’re shutting the door on fraud—preventing new bad actors from entering Medicare while we aggressively identify, investigate, and remove those already exploiting them. This is about protecting patients, restoring integrity, and safeguarding taxpayer dollars.”
We've covered a lot of this fraud here at Hot Air. Both Nick Shirley and CBS News have looked into this and found lots of obvious signs of fraud.
Nearly 500 hospices are operating within a 3-mile radius, the densest concentration of agencies in the county.
There are 137 hospices operating along Van Nuys Boulevard alone. More than half of them show signs the state has outlined as indicators of fraud.
89 companies are registered to a single building in Van Nuys...
CBS News reached out to the 56 hospice offices whose state and federal data indicate they have five or more red flags. Many of the phone numbers were either disconnected or went straight to voicemail.
There's an obvious political dimension to all of this. Gavin Newsom has been preparing to run for president in 2028 for at least a year now. That run will be based upon the claim that he's done a great job managing California. And that means the rampant fraud in these programs is something he'd like to sweep under the rug.
Newsom seemed to be having no problem hiding the ball on this fraud until Nick Shirley and CBS looked into it. And now the Trump administration is following up and making this into an even bigger story. The fraud is a real problem, but also this forces national news outlets to cover the fraud problem in California, something they've mostly (with the exception of CBS) ignored thus far.
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