The Trump administration is withholding more than $1 billion in federal Medicaid payments to California and Minnesota while demanding the Democrat-led states prove questioned Medicaid claims were lawful and not the result of waste, fraud, or abuse.  Health and Human Services Secretary Robert F. Kennedy Jr. announced Tuesday that the Department of Health and Human Services and the Centers for Medicare & Medicaid Services are deferring about $867.5 million in payments to California and another $199 million to Minnesota after federal reviews flagged high-risk Medicaid claims requiring additional documentation. “Medicaid exists to serve vulnerable Americans — not to bankroll unsupported claims,” Kennedy said in a statement. “Under President Trump’s leadership, we are restoring accountability across our public programs and protecting taxpayer dollars.” Kennedy stressed that the money has not been permanently withheld and said both states can recover the funds by documenting that the claims comply with federal Medicaid requirements. “If those states want that money, they need to provide documentation that these payments are legitimate,” Kennedy said during a press conference announcing the action. CMS Administrator Dr. Mehmet Oz said the agency is abandoning what he described as a reactive approach that attempts to recover taxpayer money only after it has already been spent. “CMS is done trying to chase down stolen and misused funds after they’ve already left the building,” Oz said. “By stopping waste and fraud before the check clears, CMS is delivering record-high savings for taxpayers and ensuring that their hard-earned dollars reach the vulnerable Americans Medicaid is meant to serve.” According to CMS, California’s deferred payments stem primarily from questions surrounding certain in-home care programs after federal reviewers identified spending growth that significantly exceeded national trends. Oz said reviewers also identified claims involving individuals with what he described as “unsatisfactory immigration status,” as well as claims connected to services allegedly billed after beneficiaries had died. Minnesota’s payment deferral follows a review of Medicaid claims across 14 high-risk service categories that federal officials said included providers previously flagged through program integrity investigations along with other claims presenting potential eligibility or billing concerns. The Medicaid payment freeze is part of the Trump administration’s broader effort to combat fraud across federal healthcare programs. Kennedy also announced that HHS is expanding efforts to permanently exclude individuals and organizations found to have committed fraud from participating in Medicare and Medicaid. Kennedy said CMS increasingly relied on artificial intelligence, advanced analytics, and other data tools to identify potentially fraudulent claims before federal matching funds are released.  California Democratic Governor Gavin Newsom rejected the administration’s allegations, calling the announcement “the same recycled political stunt we’ve seen before.” “California isn’t being targeted because Trump has evidence of fraud,” Newsom wrote on X. “We are being targeted for political reasons.” Minnesota Democratic Governor Tim Walz likewise dismissed the administration’s justification, arguing the move was designed to finance Republican tax policies. “This isn’t about fraud — it’s about cutting your healthcare so that Trump can afford the tax cuts he gave to billionaires,” Walz wrote. “They’re cutting more money in healthcare than they’ve prosecuted for fraud.”