Feds defer $1.3B in California Medicaid funding amid healthcare fraud crackdown

The federal crackdown on California is escalating, with The California Post learning the Trump administration is withholding $1.3 billion in Medicaid funding amid mounting concerns over fraud tied to the state’s hospice and home health agencies.

The anti-fraud task force, led by Vice President JD Vance, made the announcement Wednesday, just weeks after the administration suspended the licenses for 447 hospice facilities and 23 home health agencies for suspected fraudulent billing. 

“As Americans across the country have seen the rampant level of fraud going on in California, the Trump administration will not tolerate it,” a senior Trump administration official told The Post. “We thank Dr. Oz and Vice President Vance for their leadership on this issue.” 

The move comes as the administration said it is doing a full accounting of hospice and home health agencies across the country. 

“The Vice President’s task force is taking all steps necessary o ensure that American taxpayer dollars don’t make it into the hands of fraudsters,” a Vance spokesperson told The Post. 

Vance announced the administration was withholding more than $250 million in Medicaid funds in Minnesota due to fraud concerns back in February, and gave Democratic Governor Tim Walz 60 days to submit a “corrective action plan” or face additional action.  

A few months later, CMS Administrator Dr. Oz said an additional $91 million in federal medicaid funding was being deferred in Minnesota, citing the program’s “serious vulnerabilities to fraud.”

California’s hospice and home health programs have been at the center of the nation’s clampdown on fraud. 

Multiple investigations from The Post revealed dozens of suspicious hospice and home health facilities, and uncovered a network of doctors that appear to be fueling tens of millions in fraudulent billing — resulting in CMS revoking one doctor’s license to bill Medicare and dozens of agencies licenses being suspended.

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