Medicaid anti-fraud deferrals: California ($867.5M) and Minnesota ($199M)

On July 21, 2026, Dr. Mehmet Oz joined HHS Secretary Robert F. Kennedy Jr. to announce that CMS would defer more than $1 billion in federal Medicaid payments — $867.5 million to California and $199 million to Minnesota — pending documentation for what the department called “high-risk Medicaid claims.” The claims at issue covered in-home services in California and 14 auditor-identified risk areas in Minnesota, per the HHS announcement.

Oz’s message was blunt: “If it smells like fraud, we’re not paying for it anymore.” Governors Gavin Newsom and Tim Walz rejected the move as political retribution against Democratic-led states. Separately, Reuters noted that neither Kennedy nor Oz offered specific new evidence of fraud at the July 21 press event.

KFF Health News reported separately (March 2026) that, while Oz said California wasn’t fighting fraud, the state is part of a larger national battle and outperforms most states in recovering fraud dollars.

Timeline

• July 21, 2026 — Oz and Kennedy announce CMS is deferring $867.5M (California) and $199M (Minnesota) in federal Medicaid payments pending fraud-review documentation; Oz: “If it smells like fraud, we’re not paying for it anymore.” (HHS; NY Post)
• July 2026 — Governors Newsom and Walz call the move political retribution; Reuters notes no specific new evidence of fraud was presented at the announcement. (NY Post; Reuters)