Medicare/Medicaid Fraud Crackdown and Medicaid Payment Deferrals
Advancing
On July 21, 2026, HHS and CMS deferred more than $1 billion in federal Medicaid payments — $867.5 million to California and $199 million to Minnesota — pending documentation of high-risk claims, per the HHS press release. Kennedy said: “States that receive federal Medicaid funding must demonstrate that every dollar meets federal requirements.” Kennedy also delegated to CMS the authority to exclude providers from federal health programs, a power previously held only by the HHS Office of Inspector General, per King & Spalding/Mondaq.
At the MAHA Summit on September 29, 2026, appearing alongside Vice President Vance — who leads the White House anti-fraud task force — Kennedy said HHS had “uncovered billions more” stolen through Medicare fraud, according to Zeale News. He cited a “skin substitutes” program whose cost he said grew from $200 million (2019) to $14 billion (2025), on track for $23 billion in 2026, which HHS says it cut to roughly $1 billion. The White House “fraud ledger” reportedly shows more than $260 billion discovered since January 2025.
The moves drew sharp criticism: Governor Newsom’s office and Governor Walz called the deferrals a political stunt or retribution. Reuters noted at the time of the announcement that no proof of fraud had been offered publicly.
Timeline
- July 21, 2026 — HHS/CMS defer $1B+ in Medicaid payments to California ($867.5M) and Minnesota ($199M) pending fraud-review documentation; CMS gains provider-exclusion authority.
- September 29, 2026 — At the MAHA Summit, Kennedy announces “billions more” uncovered in Medicare fraud, citing the “skin substitutes” program.
