Vice President J.D. Vance announced on Wednesday, May 13 that as part of a new initiative to root out fraud in federal health programs, the Trump administration will defer $1.3 billion in Medicaid reimbursements from the state of California.
The topic of California’s hospice care fraud has been a major focus of scrutiny by state leadership, members of President Donald Trump’s administration, and critics of Governor Gavin Newsom. In his announcement, Vance claimed that the administration was prepared to suspend these funds “because the State of California does not take fraud seriously enough.”
“There are California taxpayers and American taxpayers who are being defrauded because California is not taking its program seriously,” Vance said during a press conference.
what is the administration doing
The decision was part of a plan by Vance’s Anti-Fraud Task Force to implement a six-month nationwide, data-driven moratorium on new Medicare enrollments for hospices and home health agencies.
The Centers for Medicare and Medicaid Services, led by Dr. Mehmet Oz, will use the six-month pause to conduct investigations and review data on Medicare programs, with the goal of weeding out hospice and home health agencies suspected of committing fraud.
Oz said, “Today we are closing the door on fraud – preventing new bad actors from entering Medicare, while we aggressively identify, investigate and remove those who are already exploiting them.” “This is about protecting patients, restoring integrity and protecting taxpayer dollars.”
California fights back
California Attorney General Rob Bonta called the administration’s actions “unlawful” and said his office would “carefully review all available information” and could challenge the administration’s decision to jeopardize “Californians’ rights or access to vital services.”
“Once again, California is being targeted for purely political reasons,” Bonta said on X.
Bonta and his office have rejected criticism that the state does not take action against hospice fraud. In April, Bonta announced that the California Department of Justice had arrested five people in connection with a major health care scheme in Southern California that defrauded taxpayers of nearly a quarter billion dollars.
“For years, California has led the way in protecting public programs from fraud and abuse,” Gov. Newsom said in an April 10 press release. “We hold accountable to the fullest extent of the law anyone who tries to defraud taxpayers and take advantage of public programs, especially sensitive ones like hospice care.”
Newsom had not publicly responded to the administration’s moratorium decision at the time of publication. However, soon after Vance made the announcement, Newsom’s press office criticized Axe’s move.
Newsom’s press office posted, “We hate fraud. But this isn’t it.” “Vance and Oz are attacking programs that keep seniors and disabled people out of nursing homes. Too sick.”