The action was part of a nationwide crackdown on fraud, waste, and abuse in the Medicare and Medicaid systems.
The Trump administration will withhold $1.3 billion in Medicaid payments to California due to potentially fraudulent billing patterns, Vice President JD Vance announced on May 13.
The action comes among a host of others taken recently to crack down on fraudulent activity in Medicare and Medicaid.
“We want to protect these programs for the kids and the families who need them. We want to ensure that the American taxpayer isn’t getting fleeced,” Vance told reporters.
Analysis of Medicaid billing patterns in California aroused suspicion, according to Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services.
“We’ve discovered $630 million in billing from folks who are egregiously the top 5 percent of outliers in billing. These numbers are so big you can’t imagine anyone billing for these [amounts],” Oz told reporters.
California itself is an outlier among states, Oz said.
“In California, the growth of spending on personal care services is twice the rate of the average of the rest of the country,” Oz said.
“We estimate there’s $500 million that could be a risk of being taken from federal taxpayers.”
The withholding, technically called a deferral, leaves open the possibility that the payments could be made if the spending is found to be legitimate.
Criminal Prosecution
Vance also announced a push to enlist states to partner with the federal government on fraud enforcement by actively prosecuting fraud cases.
Although all states have federally funded Medicaid fraud control units, some do not appear to prosecute criminal cases involving fraud, Vance said.
Hawaii has brought no criminal indictments for Medicaid fraud over the past few years, Vance said. New York, which has one of the nation’s largest Medicaid programs, has prosecuted very few cases in recent years.
To encourage more aggressive enforcement, the administration has written to all 50 states requiring them to document the effectiveness of their enforcement efforts.
“If they do not aggressively prosecute Medicaid fraud, we are going to turn off the money that goes to these anti-fraud units,” Vance said.
