Minnesota remains front line in Vance's 'war on fraud'; Walz given 60 days 'to clean up the systems'
Vice President JD Vance announced Wednesday that the Trump administration is temporarily halting Medicaid funding to the state of Minnesota, giving Democratic Minnesota Gov. Tim Walz 60 days to clean up how the state doles out funding.
"We have decided to temporarily halt certain amounts of Medicaid funding that are going to the state of Minnesota in order to ensure that the state of Minnesota takes its obligations seriously to be good stewards of the American people's tax money," Vance said Wednesday at a press event attended by Mehmet Oz, administrator for the Centers for Medicare & Medicaid Services.
The announcement was made after President Donald Trump railed against fraud in the Gopher State Tuesday evening in his State of the Union address.
The administration and Congress have zeroed in on rampant abuse of federal taxpayers' funds since December 2025, when details of Minnesota's fraud relating to social and welfare programs stretching back to the COVID-19 pandemic first came under the national spotlight. Investigators have since estimated the Minnesota scheme could top $9 billion.
Trump pointed to his vice president as leading the administration's "war on fraud" during his State of the Union remarks.
Vance explained Wednesday that "we are 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."
The vice president added that officials have verified that a program in Minnesota intended to provide after-school care to autistic children actually benefited fraudsters.
"A lot of people are getting rich off the generosity of American taxpayers," Vance said. "But more fundamentally, and more importantly than that, it means that there are kids in Minnesota who deserve these services, who need these services, and they're not going to those kids. They're going to fraudsters in Minneapolis. That is unacceptable. And that's the sort of thing that we're cutting off with this action today."
Oz added that the pause marks "the largest action against fraud that we've ever taken" at the Centers for Medicare & Medicaid Services, before launching into how the administration is deferring funds to the state.
HEAVILY REDACTED AUDIT FINDS MINNESOTA MEDICAID HAD WIDESPREAD VULNERABILITIES
"It's going to be $259 million of deferred payments for Medicaid to Minnesota, which we're announcing, as I speak, to Gov. Walz and his team," Oz said. "That's based on an audit of the last three months of 2025. Restated, a quarter billion dollars is not going to be paid this month to Minnesota for its Medicaid claims.
"We have notified the state and said that we will give them the money, but we're going to hold it and only release it after they propose and act on a comprehensive corrective action plan to solve the problem," Oz said. "If Minnesota fails to clean up the systems, the state will rack up $1 billion of deferred payments this year."
Walz has 60 days to respond to a letter Oz and the administration sent to Walz on the matter, Oz said.
Fox News Digital reached out to Walz's office Wednesday afternoon for comment and has yet to receive a reply.
Oz said he believes Walz will take the matter seriously and noted fraud is not exclusive to Minnesota.
"These schemes disproportionately involve immigrant communities," Oz continued. "They're insulated, they're able to … organize efforts, and sometimes they don't understand what's going on."
Vance added that the administration does not want to make this move, but it is needed due to Minnesota being "careless with federal tax dollars."
"All we need the governor and the administration of Minnesota to do is something quite simple, which is to show that before you give Medicaid funds to somebody, you're taking seriously whether they provided the services that they say that they're providing," the vice president said, calling the alleged fraud a "disgrace."
MINNESOTA DEMOCRATS DEMAND REPARATIONS FROM ICE AFTER LOSING $18 BILLION TO SOMALI FRAUD
Trump spotlighted the fraud in his State of the Union address Tuesday, underscoring that while Minnesota has taken the spotlight, schemes run deep in other states as well.
"When it comes to the corruption that is plundering — it really, it’s plundering America — there’s been no more stunning example than Minnesota, where members of the Somali community have pillaged an estimated $19 billion from the American taxpayer," Trump said. "Oh, we have all the information.
"And, in actuality, the number is much higher than that, and California, Massachusetts, Maine and many other states are even worse. This is the kind of corruption that shreds the fabric of a nation, and we are working on it like you wouldn’t believe," Trump added, before naming Vance the administration's leader taking on fraud.