Minnesota Governor Tim Walz today fired back at the Trump administration for halting approximately $259.5 million in federal Medicaid funding to the state’s fraud-plagued public health programs.
The governor’s announcement of new anti-fraud measures came one day after a press conference featuring Vice President JD Vance, Centers for Medicare & Medicaid Services Administrator Mehmet Oz, and HHS Secretary Robert F. Kennedy Jr. who laid out the problem.
According to CMS: “Minnesota’s Medicaid spending for the fourth quarter of FY 2025 resulted in a deferral of $259,505,491 in federal matching funds. This includes state expenditures of $243.8 million for unsupported or potentially fraudulent Medicaid claims and $15.4 million related to claims involving individuals lacking satisfactory immigration status.” The agency used traditional financial management tools and new program integrity strategies to flag unusually high spending and rapid growth in areas such as:
- Personal care services
- Home and community-based services
- Other practitioner services
Governor Walz dismissed the Trump administration’s quarter-billion-dollar payment delay as pure political retribution. “This has nothing to do with fraud,” he said. “The agents Trump sent to investigate are shooting protesters and arresting children. His DOJ is gutting the U.S. Attorney’s Office and crippling their ability to prosecute fraud.”
In reality, both taxpayers and patients deserve protection. Medicaid is funded through a state-federal partnership—often roughly 50-50—and the federal government has every right to ensure its dollars are spent legally and for the benefit of eligible patients. Taxpayers in Alabama (or any state) have needy residents too; their money shouldn’t end up in the pockets of criminals in Minnesota or smuggled abroad. These fraud schemes don’t just steal tax dollars—they deprive sick, injured, and disabled people of the health care they need.
This isn’t new. The Walz administration has long prioritized pushing funds out the door to favored interest groups, treating leakage as a “cost of doing business.” In the first year of Walz’s tenure, while probing improper payments to nonprofits serving tribes, the Minnesota Star Tribune revealed that the Department of Human Services violated the law 200 times with improper contracts. That same year, federal CMS fined Minnesota $150 million for improper Medicaid enrollment.
The federal government is a partner in funding and overseeing these programs. Vulnerable Minnesotans rely on Medicaid to survive and have federally protected rights to that care. If the feds don’t withhold funds until the mess is cleaned up, reform will never happen. Programs like MinnesotaCare and MNSure operate under state-federal agreements, and if they are being violated, the sweetheart deals that shovel disproportionate amounts of federal dollars here could be cancelled.
After seven years, the Walz administration has finally released an action plan to address fraud.
