CMS Defers $91M More in Medicaid Funds to Minnesota

The Centers for Medicare and Medicaid Services announced Thursday that it is deferring an additional $91 million in federal Medicaid funding to Minnesota amid ongoing concerns about fraud and program oversight in the state's health services.

CMS Administrator Dr. Mehmet Oz detailed the decision in a video statement posted on social media, saying the agency had notified Governor Tim Walz and state officials beforehand. The deferral includes $76 million linked to 14 service categories considered vulnerable to fraud and $14 million related to potential payments for ineligible individuals. Oz described the action as temporary, pending additional documentation from Minnesota to verify the claims. "Minnesota state-run programs have raised serious red flags," Oz said, citing a recent federal audit of the fourth quarter of fiscal 2025 that identified irregularities, including issues in childcare programs.

This latest hold builds on approximately $250 million deferred earlier this year, bringing the total paused payments to more than $340 million. In February, CMS initially withheld funds over similar fraud concerns, prompting Minnesota to sue the agency and the Department of Health and...