Trump Administration Defers $1.3 Billion in California Medicaid Funds as Vance Expands 6-Month Fraud Crackdown
Updated
Updated · USA TODAY · May 13
Trump Administration Defers $1.3 Billion in California Medicaid Funds as Vance Expands 6-Month Fraud Crackdown
14 articles · Updated · USA TODAY · May 13
$1.3 billion in California Medicaid reimbursements will be deferred, with Vice President JD Vance saying the state failed to take hospice fraud seriously.
A six-month nationwide moratorium will halt new Medicare enrollment for hospices and home health agencies while CMS reviews data and investigates suspected fraud.
California Attorney General Rob Bonta called the move unlawful and said the state may challenge it, while Newsom's office said the administration was targeting programs that keep seniors and disabled people at home.
The clash follows California's own April fraud case, when state authorities announced five arrests in a Southern California scheme that allegedly defrauded taxpayers of nearly $250 million.
The administration has also warned other states that Medicaid and Medicare funding could be at risk if they do not aggressively pursue fraud cases.
What evidence must states provide to avoid massive federal cuts to their Medicaid programs?
How will a nationwide freeze on new home health agencies affect care for the elderly and disabled?
Can advanced AI truly outsmart the crime rings behind billion-dollar healthcare scams?
Trump Administration Freezes Billions in Medicaid Payments, Imposes Nationwide Moratoriums to Combat Healthcare Fraud
Overview
The Trump administration responded to widespread waste, fraud, and abuse in federal entitlement programs by launching a strict nationwide crackdown. This campaign, starting in May 2026, aimed to restore fiscal responsibility and protect taxpayers. Immediate actions included withholding federal funds from states with high fraud risks, imposing nationwide moratoriums on new provider enrollments, and shifting oversight to focus on sectors like hospice, home health, and durable medical equipment. These measures marked a new era of enforcement, signaling a strategic shift in how the government addresses fraud and ensures accountability in federal programs.