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3w ago

CMS Defers Another $91 Million in Minnesota Medicaid Funds Over Fraud Risks

The move keeps federal dollars on hold until Minnesota proves its Medicaid bills meet program rules.

FILE - Administrator for the Centers for Medicare & Medicaid Services Dr. Mehmet Oz speaks during a news conference on efforts to combat fraud, in the Old Eisenhower Executive Office Building on the White House campus Feb. 25, 2026, in Washington. (AP Photo/Tom Brenner, File)
Centers for Medicare & Medicaid Services administrator Dr. Mehmet Oz attends an event on health care affordability in the Oval Office at the White House, Thursday, April 23, 2026, in Washington. (AP Photo/Mark Schiefelbein)
Centers for Medicare & Medicaid Services administrator Dr. Mehmet Oz speaks speaks during an event on health care affordability in the Oval Office at the White House, Thursday, April 23, 2026, in Washington. (AP Photo/Mark Schiefelbein)
FILE - Minnesota Gov. Tim Walz speaks during a House Committee on Oversight and Government Reform hearing on oversight of fraud and misuse of Federal funds in Minnesota, March 4, 2026, on Capitol Hill in Washington. (AP Photo/Rod Lamkey, Jr., File)

Overview

  • CMS, which announced the step Thursday, deferred another $91 million in Minnesota Medicaid payments on top of an earlier pause of roughly $243–$260 million.
  • Of the new holdback, $76 million targets 14 service categories CMS labels highly vulnerable to fraud, and about $14 million involves program-integrity issues such as payments for ineligible people.
  • CMS approved the state’s corrective action plan in March but says it will not release any money until Minnesota supplies documentation that verifies the billed charges.
  • Gov. Tim Walz called the action a campaign of retribution, while the state’s lawsuit over the earlier freeze continues after a judge declined to order the funds returned.
  • Hospitals warn the delays could deepen financial strain, and the Minnesota Senate this week set aside hundreds of millions of dollars to stabilize facilities facing shortfalls.