The federal government deferred an additional $91 million in Medicaid funding to Minnesota on April 30, a move that keeps pressure on a program that pays for social services for some of the state’s most vulnerable residents.
Dr. Mehmet Oz said on X that his agency told Gov. Tim Walz on Thursday that it was deferring the money, and said Minnesota state-run programs have raised serious red flags. Oz also said a recent audit of Minnesota Medicaid billing found millions of dollars went to illegal immigrants who were not supposed to be getting the coverage.
The new deferral comes on top of the $259 million the federal government said in February it would withhold over fraud concerns. That fight is already in court: Attorney General Keith Ellison sued CMS and the Department of Health and Human Services to stop the freeze, and a federal court earlier this month denied Minnesota’s request to block the Trump administration from deferring the quarter-billion-dollar sum. In March, federal officials approved a state plan to improve oversight.
Walz accused the Trump administration of exploiting social services fraud as he said he is working to stop it. “This is a transparent effort to cut funding for the same working people and rural Minnesota hospitals they’ve had in their crosshairs for months,” he said. “Minnesota will not stand for this continued campaign of retribution.”
Department of Human Services Commissioner Shireen Gandhi said the state was “disappointed to learn that CMS will extend deferrals of needed funds for another quarter,” but added that the department will “continue to fight against the criminals who target Medicaid programs.”
The latest move lands as federal and state investigators continue probing social services fraud in Minnesota. Oz said the recent raids were tied to child care billing concerns, and on April 28 agents searched five locations of four metro-area autism providers and numerous child care centers. The 22 search warrant affidavits remain sealed, and no charges have been filed.
Oz asked Minnesota leaders to provide additional documentation to verify the charges. For Minnesota, the dispute is no longer just about one funding holdback. The immediate question is whether the state can persuade federal officials that its oversight is strong enough to reverse a widening freeze before more money for care and social services disappears.
