Vance Takes First Major Action As Fraud Czar With Sights Set On Minnesota

Vice President JD Vance announced Wednesday that the Trump administration will withhold nearly $260 million in Medicaid reimbursements from Minnesota as part of what officials describe as a sweeping anti-fraud crackdown.

Vance, whom President Donald Trump appointed to spearhead the administration’s anti-fraud efforts during the State of the Union address, said the move is intended to pressure Minnesota’s Democrat-controlled government to address what federal officials characterize as widespread abuse of taxpayer funds.

“What this means is that first of all, the providers on the ground in Minnesota have actually already been paid,” Vance said at a White House press conference alongside Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services. “What we’re doing is we’re stopping the federal payments that will go to the state government until the state government takes its obligations seriously to stop the fraud that’s being perpetrated against the American taxpayer.”

According to Oz, Minnesota officials, including Governor Tim Walz, have been notified that federal Medicaid reimbursements will be paused until the state demonstrates corrective action. Oz warned that if the state does not resolve the issues, deferred payments could reach $1 billion this year.

Oz emphasized that the funding freeze would not directly impact residents because the state has already paid providers and maintains a budget reserve fund. “If providers and beneficiaries are worried about getting their money and services, please call your governor,” Oz said. “These are services the governor has already paid for. We are just not reimbursing the state.”

The administration has identified 14 Minnesota programs for review, including autism service providers and medical transportation services that officials say show signs of systemic fraud. The state has been given 60 days to respond to the federal government’s concerns.

Federal prosecutors have already secured dozens of convictions tied to a large fraud scheme in Minnesota’s “Feeding Our Future” program, which received federal pandemic funds intended to provide meals to children but allegedly failed to deliver services as claimed.

Vance also cited concerns about Medicaid-funded autism programs, alleging that some providers enriched themselves without delivering legitimate care. Oz added that investigators uncovered schemes in which children were falsely enrolled for autism services, resulting in significant Medicaid billing for services that were allegedly never provided.

Oz described the initiative as the “largest anti-fraud effort of its kind” in the history of the Centers for Medicare & Medicaid Services, framing the action as part of a broader push to safeguard federal spending and ensure Medicaid funds reach intended recipients.