California Governor Gavin Newsom on Wednesday criticized the Trump administration's decision to halt more than $1 billion in federal Medicaid payments to the state, labeling the action as politically motivated.
Newsom asserted that Health and Human Services Secretary Robert F. Kennedy Jr., under the Trump administration, lacks concrete proof of Medicaid fraud in California and suggested the administration is requesting information the state has already provided. "We take fraud seriously," Newsom stated, questioning the purpose of the federal action. "What's the point of the theater?"
The governor further alleged that the halt is an attempt to undermine Xavier Becerra, the Democratic candidate for governor and former Health and Human Services chief under President Joe Biden. Newsom insisted that California is committed to combating fraud and does not engage in political manipulation, stating, "We don't politicize it like these guys."
The Centers for Medicare and Medicaid Services (CMS) is deferring over $867 million in federal Medicaid payments to California and $200 million to Minnesota. This hold is in place while federal officials review what they deem "high-risk Medicaid claims" and document deficiencies.
According to CMS administrator Mehmet Oz, federal officials suspect the questionable spending in California is primarily linked to in-home services. Over the past two federal fiscal years, California's spending in these programs has increased by 24%, compared to an average of 12% for the rest of the country.
Kennedy had previously stated that California and Minnesota must provide documentation proving the legitimacy of payments if they wish to continue receiving funds for low-income healthcare. He also criticized the Biden administration's oversight of Medicaid, alleging that Becerra "looked the other way while fraud, waste, and abuse exploded."