The checks are not in the mail.
Health Secretary Robert F. Kennedy Jr. froze more than $1 billion in federal Medicaid payments to California and Minnesota on Tuesday, demanding that the two Democratic-led states produce documentation supporting claims flagged for additional review.
“We are not sending Medicaid dollars out the door until we have confidence that they are being spent lawfully and appropriately,” Kennedy said.
The Centers for Medicare and Medicaid Services deferred approximately $867.5 million bound for California and another $199 million for Minnesota.
The action is not a permanent funding cut, and it does not establish that the states committed fraud. Both states can submit records demonstrating that the claims comply with federal Medicaid requirements, at which point the money could be released.
Kennedy’s message to California Gov. Gavin Newsom and Minnesota Gov. Tim Walz was simple: Show Washington the receipts.
If the governors want the federal money for low-income health care, “they need to provide documentation that these payments are legitimate,” Kennedy said.
The Department of Health and Human Services said its review of California focused on certain in-home care programs after investigators found spending growth that dramatically exceeded national trends. CMS said other claims also lacked sufficient supporting documentation.
Minnesota’s review covered 14 service areas classified as high risk. Federal officials identified claims involving providers already flagged through program-integrity reviews, along with other expenditures raising possible eligibility or billing concerns.
Kennedy accused the Biden administration and Democratic leaders in both states of weakening safeguards against waste and theft.
“Instead of protecting your money, they open the floodgates to theft,” Kennedy said. “They dismantle basic program integrity and oversight.”
CMS Administrator Dr. Mehmet Oz said the agency is shifting away from Washington’s traditional “pay and chase” approach, in which questionable payments leave the Treasury before investigators attempt to recover them.
“CMS is done trying to chase down stolen and misused funds after they’ve already left the building,” Oz said in the HHS announcement.
Kennedy described the deferrals as part of President Trump’s broader campaign against waste, fraud and abuse across federal health programs.
“Medicaid exists to serve vulnerable Americans, not to bankroll unsupported claims,” he said in the agency’s formal statement.
The administration’s position is that tighter scrutiny protects Medicaid recipients by keeping limited resources from flowing to fraudulent or improperly documented providers. State officials, however, will have the opportunity to contest the findings and demonstrate that the questioned services were legitimate.
The California and Minnesota reviews are separate from the Justice Department’s sweeping health care fraud enforcement operation announced in June.
Watch the clip below:
.@SecKennedy announces the Trump Administration is pausing more than $1 billion in Medicaid payments to California and Minnesota due to suspected fraud and noncompliance.
"If those states want that money, they need to provide documentation that these payments are legitimate." pic.twitter.com/6VjDVZ0Ovu
— Rapid Response 47 (@RapidResponse47) July 21, 2026
More over at The New York Post:
RFK Jr. yanks Medicaid funds to California and Minnesota, says Dems 'opened the floodgates to theft' https://t.co/GaiDUhnClb pic.twitter.com/FCBrqlMRsA
— New York Post (@nypost) July 21, 2026
