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The Trump administration has deferred a further $1.2 billion in federal Medicaid reimbursements to California, the Centers for Medicare and Medicaid Services announced on Tuesday, October 20, in the Oval Office, where CMS Administrator Dr. Mehmet Oz stood alongside President Donald Trump and independent journalist Nick Shirley.
Oz said the action targeted California's personal care services programme, the in-home help that allows older adults and people with disabilities to bathe, dress, eat and remain in their own homes. He said the programme had grown by 24 percent in the last three years, twice the rate of the national average, and that the size of that growth was impossible for federal officials to understand.
"California has been growing that program 24% in the last three years. That is twice the rate of every other state average in the country," Oz said. "Impossible for us to understand how that could be, so we're taking major action in California." State officials were notified of the decision on Tuesday, he said.
The announcement was made at an event at which the president unveiled a $25 million whistle-blower programme for reporting fraud. The Los Angeles Times reported that Oz did not present evidence of fraud at the announcement, pointing instead to the programme's growth and to payments for help that families might otherwise provide for free, such as carrying groceries upstairs.
Oz linked the California action to Shirley's reporting. He said Shirley had also found potential fraud in California in home health services, adult daycare and hospice providers, after his earlier reporting on Minnesota, and that the findings prompted CMS to investigate further in California. Shirley described alleged irregularities in California daycare and hospice services in testimony to the Senate on July 15.
California pushed back sharply. A spokesperson for Governor Gavin Newsom condemned the decision as a cruel and reckless attempt to use vulnerable Californians as political pawns, putting seniors, children and people with disabilities at risk. The spokesperson said in-home care lets Californians age and live at home and saves Medi-Cal roughly $100,000 a year for each person who can safely avoid a nursing facility, and said California investigates credible allegations of wrongdoing, recovers improper payments and works with state and federal partners to hold bad actors accountable.
The deferral is the third for California this year. In May, the administration held back $1.3 billion in Medicaid reimbursements over concerns about fraud in the state's hospice and in-home care programmes, and in July it paused more than $1 billion in Medicaid payments to California and Minnesota over suspected fraud and non-compliance. The administration has made fighting fraud in federal benefit programmes a central message ahead of the November 3 midterm elections, with Vice President JD Vance chairing the White House Task Force to Eliminate Fraud.