Robert F. Kennedy Jr., the man now running Health and Human Services, decided on July 21, 2026 that California and Minnesota need to show their receipts before getting over a billion dollars in Medicaid money. As The American Tribune reported, the Centers for Medicare and Medicaid Services is holding back $867.5 million from the Golden State and $199 million from the Land of 10,000 Lakes because a whole bunch of claims got flagged as suspicious.
Now, before anyone panics, HHS wants you to know these funds are being "deferred," not slashed. Think of it like your mom holding your allowance until you clean your room. Both states can totally get their money back. They just have to prove that every single dollar they billed for actually went toward real services for real, living, breathing human beings. Which, apparently, was not always the case.
Kennedy personally called out California Governor Gavin Newsom and Minnesota Governor Tim Walz by name during a press conference, essentially telling them that all they need is some basic paperwork proving the services were legit. "That's common sense," Kennedy declared, which is a phrase that gets politicians very excited but rarely describes anything happening in government.
Then there's Dr. Mehmet Oz, the former TV doctor who now runs CMS, bringing the kind of blunt energy you'd expect from someone who spent years telling America about miracle supplements. Oz proclaimed that his agency is finished chasing stolen funds after the money already went out the door. Instead, they're stopping fraud "before the check clears," which honestly sounds like something that should have been the policy all along.
Here's where it gets truly wild. Oz revealed that the review discovered claims submitted for people who were deceased. Yes, apparently some providers were billing for services rendered to individuals who had already shuffled off this mortal coil. If that's not the definition of a red flag, nothing is.
The breakdown for California includes roughly $646 million tied to in-home supportive services and another $221 million connected to claims involving individuals with "unsatisfactory immigration status." Oz also noted that California's spending on those in-home services jumped 24% over the previous two fiscal years, which is quite the growth spurt.
Minnesota's situation involves the state recently kicking 3,000 providers to the curb for failing background checks, botching site visits, and other compliance disasters.
Kennedy also took a flamethrower to the previous administration's handling of Medicaid oversight, arguing that former HHS Secretary Xavier Becerra gutted anti-fraud staffing and adopted a strategy of paying first and asking questions later. "The scammers got paid. The taxpayers got stuck with these enormous bills," Kennedy said, which is a sentence that should probably be carved into marble somewhere.
The administration is now using artificial intelligence to sniff out sketchy spending patterns, because apparently humans weren't getting the job done. This marks the second time the current administration has gone after these two states in what officials are calling their "war on fraud." At this rate, California and Minnesota might want to invest in better bookkeeping software.
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