RFK Jr. Freezes $1 Billion in Medicaid Payments to Two States

Health Secretary Robert F. Kennedy Jr. announced a freeze of more than $1 billion in federal Medicaid payments to California and Minnesota on July 21, 2026. The action involves approximately $867.5 million for California and roughly $200 million for Minnesota. Federal officials stated that AI and advanced analytics identified high-risk claims, including billing for deceased individuals and providers billing for multiple patients simultaneously.

CMS Administrator Mehmet Oz detailed specific concerns regarding California's In-home Supportive Services and 14 high-risk programs in Minnesota. Oz noted that spending growth in California doubled the national average, describing the freeze as a proactive strategy to stop fraud before payments are issued rather than recovering funds afterward. The administration is also expanding its exclusion authority to remove fraudulent providers from federal programs.

Governors Gavin Newsom and Tim Walz condemned the move as a political stunt. Newsom argued the freeze was politically motivated, while Walz's office claimed the administration is cutting more healthcare funding than it has prosecuted for fraud, suggesting the funds might be used to offset tax cuts for wealthy Americans. Minnesota state Medicaid director John Connolly called the federal government's actions unprecedented and punitive. The administration stated funds would be restored if the states provide documentation proving the payments are legitimate.