We learn via X that Dr. Oz has deferred $259.5 million of quarterly federal Medicaid funding in Minnesota to prevent payment of questionable claims while further investigation is completed. The related press release explains:
CMS’ review of Minnesota’s Medicaid spending for the fourth quarter in FY 2025 resulted in a deferral of $259,505,491 in federal matching funds. This includes state expenditures of $243.8 million for unsupported or potentially fraudulent Medicaid claims and $15.4 million related to claims involving individuals lacking a satisfactory immigration status. The agency utilized both traditional financial management approaches and new program integrity oversight strategies to identify unusually high spending and rapid growth in certain service areas, including:
• Personal care services;
• Home and community-based services; and
• Other practitioner services.CMS is deferring those federal funds to protect taxpayer dollars while ensuring the state has the opportunity to respond and provide information and documentation during the ongoing review. Should Minnesota fail to clean up its significant program integrity vulnerabilities or demonstrate that the expenditures are allowable, CMS may defer more than $1 billion in federal funds over the next year. CMS also continues to intensely oversee Minnesota’s efforts to carry out its corrective action plan to address the underlying causes of fraud, waste, and abuse within the state.
Let the weeping and wailing begin, as in the voices amplified by the Star Tribune. Minnesota’s Medicaid programs are a cesspool of fraud. Governor Walz resists serious remedial measures.
Take a look, for example, at the heavily redacted January 31 report released by the Minnesota Department of Human Services: Pre-payment solution roadmap and Rapid Response Team to improve detection of Fraud, Waste and Abuse in DHS health care programs: Vulnerability Assessment. The report was prepared by Optum, the consultant retained by the Minnesota DHS to address the massive public-programs fraud that has taken place under the jurisdiction of Governor Walz.
The Minnesota Reformer has a helpful summary of the report here. Reporter Alyssa Chen served up this quotable quote from an official with the Minnestoa spirit. Referring to one of Minnesota’s many “waivered” Medicaid program:
DHS Deputy Commissioner John Connolly noted in a press briefing that claims from early autism intervention centers were flagged by Optum’s analysis at a particularly high rate — over 90% of claims didn’t clearly match policies or procedures. And, of the $1.7 billion that could have been saved from better-written policies, $1 billion was spent on early autism intervention centers.
Connolly said, however, the fact that the claims raised red flags for Optum does not necessarily indicate fraud, waste or abuse. Instead, they could represent instances where claims that deserve to be approved are unnecessarily flagged, or providers may not have training file claims correctly.
“We won’t know until we do the work to understand,” Connolly said.
With the obligatory bafflegab, it might be easy to lose sight of the number. That’s ninety — nine zero — percent. The proposition that it’s never too late doesn’t seem to apply.
And in related news, after more than a year of leading the Minnesota DHS on an interim basis, Commissioner Shireen Gandhi has now been permanently appointed to the role. As Ann Bauer commented on X: “The person who oversaw runaway fraud in every social service program under her control has been appointed to a permanent position in Minnesota. Because, of course!”
Today, alongside @VP, we took unprecedented action against Medicare and Medicaid fraud. We’re cracking down on criminals and bad actors, and issuing a nationwide call to action for Americans to share their input on how we can continue to strengthen our efforts:… pic.twitter.com/cBCqONsosy
— DrOzCMS (@DrOzCMS) February 25, 2026
