WATCH: Dr. Oz says Newsom, other blue states have turned Medicaid fraud into a 'feature'
CMS Administrator Dr. Mehmet Oz says Medicaid fraud has become a "feature" blue states use to exploit the system.
President Donald Trump's chief at the Centers for Medicare and Medicaid Services (CMS), in an interview with Fox News Digital, urged California Gov. Gavin Newsom and other Democrat governors to join the administration's anti-fraud push.
"Why would you steal money from Medicaid?" Oz questioned, before explaining how he believes some states are using Medicaid-funded care programs as an economic engine for their state and will distribute federal reimbursements to pay unemployed people.
"I began to realize that stealing money from Medicaid is not a flaw for a lot of states, it's a feature of the program," he continued. "They call it 'Medicaid-ing it.'"
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He continued, "You're taking money from the federal government creating a Medicaid benefit, paying a lot of money for it. Now all these people who would have been unemployed, costing the state money, are instead of getting money from the federal government. You're taxing that, which makes the state richer."
Oz also argued the arrangement creates political incentives because those workers can unionize, which he claims benefits Democrats by allowing the unions to help fund the party’s political action committees (PACs).
"The service industry's unionizing these workers," Oz said. "That gets union dues into their coffers, those union dues can now pay for political action committees, funding. Of course, one party — always."
"That party now has a lot of money coming in for local and state elections, and we are paying for it!," he lamented.
Newsom was the main blue-state leader that Oz accused of failing to adequately address fraud in his state despite internal warnings.
"I think Governor Newsom's embarrassed," the one-time television doctor told Fox News Digital. "He's embarrassed that four years ago, he was told by his own auditors that there was such widespread fraud in California that they had to take action and they sort of dabbled."
"They did some performative things, but they didn't actually do the important steps required to stop fraud in the state."
In response to California’s failure to follow the federal government’s lead in combatting widespread fraud, the Trump administration cut over $1.3 billion in the state’s Medicaid reimbursements.
"We can't understand where the money's going," Oz said.
"We have the responsibility to the federal taxpayer to make sure this is true. Until we are comfortable with the money spent wisely, we're not paying for illegal immigrants, we're not paying for people who really don't have these coverage Medicaid, we're paying for services to people that don't exist or to folks doing these services that have not actually been authenticated as eligible to do that."
Oz encouraged all governors to follow suit in the Trump administration's efforts to put an end to fraud nationwide — state by state.
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Vice President JD Vance even recently began spearheading the administration’s new anti-fraud task force, which was formed to enact federal oversight against exploitation of federal benefit programs.
"The greatest obstacle is when the governors don't realize that if they're not aligned with the president, if they’re not on the same page, then they're pulling the oars in the opposite direction, and we're going in a circle down the drain," Oz said.
"Fraud happens because the people who have the power to stop it don't work together."