WASHINGTON — On Wednesday, Vice President JD Vance unveiled new measures as part of the Trump administration’s ongoing effort to combat fraud within federal health programs. A significant element of this initiative is the decision to withhold $1.3 billion in Medicaid reimbursements from California.
“These deceitful healthcare providers are profiting by prescribing medications that patients don’t actually need,” Vance declared during a White House event. He emphasized that both taxpayers and recipients of these programs suffer due to such fraudulent activities.
The administration, aligning with its Republican values, has also decided to implement a six-month halt on certain new Medicare enrollments. States are being urged to thoroughly investigate Medicaid fraud or face potential funding cuts, officials have stated.
These actions are part of Vance’s anti-fraud task force, which has intensified its communication efforts in the lead-up to the November elections. This committee, established by President Donald Trump, is dedicated to curbing the misuse of public funds.
Vance, who is speculated to be considering a 2028 presidential run, has leveraged this prominent responsibility from Trump to connect with Americans facing high living costs. He has showcased the task force’s achievements during various Republican campaign events and plans to highlight this initiative further in Maine on Thursday, ahead of the primary elections on June 9.
As healthcare costs continue to rise across the country, these measures are introduced amidst public concerns over access restrictions, sometimes exacerbated by federal policies. For instance, new Medicaid work requirements are anticipated to strain hospitals nationwide and may result in millions losing their health coverage.
The administration contends its vigorous fraud-busting efforts will help prevent wrongdoing in Medicaid and Medicare while preserving funding and resources for those most in need.
Deferring $1.3 billion in California payments
Dr. Mehmet Oz, who leads the Centers for Medicare and Medicaid Services, said the administration was making the “largest deferral we’ve ever made” in Medicaid funds and that it was justified.
“We’d like the state to at least come to the table and explain to us how these outlier payments have been generated,” he said.
The total cost of California’s Medicaid program, including state and federal funding, is expected to be about $222 billion for the budget year that starts July 1.
The office of Gov. Gavin Newsom, D-Calif., and the state’s Department of Finance did not immediately respond to calls and emails about the announcement.
Nationwide freeze on some new Medicare provider enrollments
Oz’s agency also announced a nationwide six-month moratorium on all new Medicare enrollments by providers of hospice and home care.
“Today we’re shutting the door on fraud — preventing new bad actors from entering Medicare while we aggressively identify, investigate, and remove those already exploiting them,” he said in a statement.
Existing hospice and home health care providers will continue to operate as usual. But CMS said it will “intensify targeted investigations, deploy advanced data analytics, and accelerate the removal” of providers in the category that are suspected of fraudulent activity.
Such a freeze is not unprecedented, said Tricia Neumann, a senior vice president and executive director for the program on Medicare policy at the health care research nonprofit KFF. She said President Bill Clinton’s Democratic administration also imposed a temporary moratorium on home health agencies.
“A brief moratorium gives the administration time to crack down on true fraud and prevent new fraudulent entities from popping up,” she said.
Several alleged fraud schemes have been prosecuted in the hospice and home health care categories, and states have acknowledged that it is a legitimate concern. But some have pushed back on the administration’s aggressive tactics and raised concerns that the catchall efforts could needlessly punish law-abiding providers that are trying to serve patients.
Also Wednesday, the Department of Health and Human Services’ internal watchdog sent letters to state attorneys general warning them to vigorously investigate possible fraud or risk losing federal money.
Moves are part of monthslong federal push
In recent months, CMS has suspended payments to hundreds of hospice and home care agencies in Los Angeles over alleged fraud and issued another six-month moratorium on suppliers of durable medical equipment, prosthetics, orthotics and certain other supplies in Medicare.
The administration also has approached at least five states with investigations into potential health care fraud and halted some $243 million in Medicaid payments to Minnesota over fraud concerns. Last month, Oz announced CMS would add to that oversight by requiring all 50 states to share how they planned to revalidate some of their Medicaid providers.
In at least one case, the administration has erred in its accusations against states. In April, CMS acknowledged to The Associated Press that it made a significant error in figures it used to help justify a fraud probe in New York. The acknowledgment deepened doubts in the administration’s methods and raised a common criticism that has been made about the second Trump administration – that it tends to attack first and confirm the facts later.
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