Medicaid Funding Warning for Minnesota

Mehmet Oz, the Administrator of the Centers for Medicare and Medicaid Services (CMS), issued a warning to Minnesota Governor Tim Walz on Friday regarding the potential loss of federal Medicaid funding unless the state addresses what Oz called the program’s “integrity.”

In a post on X, Dr. Oz stated that over $1 billion had been misappropriated in a significant Medicaid fraud scheme allegedly involving “bad actors” within the state’s Somali community. He suggested that some of this money might even have gone to support a Somali terrorist group, al-Shabab.

“CMS has never encountered anything on this scale before,” Oz remarked, urging for investigations into Walz and others involved, citing a sense of negligence among officials.

Oz demanded that Walz take corrective actions within 60 days, which include:

• Providing weekly updates on anti-fraud initiatives to CMS
• Freezing registration for high-risk providers for six months
• Verifying the legitimacy of all current providers or removing them
• Submitting a corrective action plan to CMS to curb future fraud

He cautioned, “If we are not satisfied with the state’s plans and cooperation, we will stop paying federal contributions to these programs.”

CMS officials highlighted two Minnesota Medicaid initiatives that have seen extensive cost increases. For instance, the Housing Stability Services program is projected to cost $2.6 million annually, with payouts exceeding $100 million in 2024. Additionally, funding for early intensive developmental and behavioral intervention programs skyrocketed from $3 million in 2018 to nearly $400 million this year.

“These scammers used our tax dollars to purchase luxury cars, invest in overseas real estate, and even provide bribes for parents enrolling their children in fake autism treatment centers,” Oz stated. He also questioned why Walz had not intervened, suggesting it stemmed from a focus on identity politics.

Oz criticized Minnesota officials for not effectively reporting the issue to CMS in the past, asserting, “We intervened and halted the worst of our programs, particularly Housing, and froze enrollments in others facing similar abuse.” He warned Walz, “Fix the problem in 60 days or prepare to search for spare change under the couch, because we won’t finance your mistakes any longer.”

Meanwhile, former President Donald Trump recently labeled Minnesota as a “center of money laundering activity,” announcing measures to investigate the fraudulent schemes there, which influenced his decision to end deportation protections for many Somali immigrants. Additionally, new inquiries have begun, including a Treasury Department review regarding the diversion of taxpayer funds to al-Shabab, according to Secretary Scott Bessent.

Walz’s office has yet to respond to requests for comments regarding the situation.