Officials from the Trump administration are requesting that California return over $1 billion in federal funds, alleging that this money was used to pay for the medical expenses of undocumented immigrants.
The Centers for Medicare and Medicaid Services (CMS) declared in May that they would increase oversight on states for illegally utilizing Medicaid funds for services benefiting undocumented immigrants. They pointed out that Medicaid resources should primarily be reserved for emergency medical needs for this group.
As part of this initiative, CMS noted that states might be obligated to reimburse the federal government for money spent on noncitizens. CMS Administrator Dr. Mehmet Oz disclosed in October that over $1 billion in federal taxpayer funds were potentially misused for Medicaid coverage for undocumented individuals.
“My team is working to recover that money,” he stated, referring to the findings as “shocking.” He indicated that an investigation into six states revealed improper use of federal dollars for programs falsely claimed as state-funded, impacting even individuals with serious criminal convictions.
Specifically, California was found responsible for $1.3 billion, while other states like Washington, D.C., Illinois, Washington, Colorado, and Oregon were also implicated for lesser amounts.
Oz mentioned that several states have been notified, and many have already started to return funds to CMS. However, he reported on Wednesday that new data indicated the total could reach $1.8 billion across eight states.
In particular, CMS will withhold nearly $300 million from California, labeling it the “worst offender,” until the state can prove the proper use of funds.
Bill Esseri, the First Assistant U.S. Attorney for California, emphasized that an audit found federal resources misappropriated for the healthcare of undocumented individuals. “We are united in combating healthcare fraud to redirect those funds to Americans in need!” he emphasized.
California officials, however, have refuted accusations of misuse. They have previously stated that claims regarding improper use of federal Medicaid funds are completely unfounded and misrepresent legal standards.
Governor Gavin Newsom’s office has not provided any commentary on the matter.
In Washington, D.C., officials are set to repay more than $650,000 to CMS by mid-November. Illinois Medicaid representatives have also countered the allegations, claiming the Trump administration is misinforming the public about Medicaid funding uses.
Moreover, Washington state health authorities questioned CMS’s findings, stating that the figures presented by Oz were inaccurate. “We were surprised by Dr. Oz’s comments, especially as we work with CMS in good faith,” a spokesperson said.
In Colorado, officials maintain compliance with laws regarding payments for interviews with undocumented individuals, disputing the federal figures due to erroneous preliminary data. Similarly, the Oregon Health Authority called CMS’s claims misleading, asserting that they misrepresent the state’s emergency medical infrastructure and ongoing audit processes.
