Federal Medicaid Funding at Risk for Minnesota

Dr. Mehmet Oz, the Administrator of the Centers for Medicare and Medicaid Services (CMS), alerted Minnesota Governor Tim Walz on Friday about potential losses in federal Medicaid funding unless the integrity of the program is restored.

In a post on X, Oz described how over $1 billion was misappropriated in a significant Medicaid fraud operation allegedly involving “bad actors” from Minnesota’s Somali community. He mentioned concerns that some of the misused funds might have been funneled to the Somali terrorist group Al Shebab.

“CMS staff have expressed that they’ve never encountered fraud like this within Medicaid. There’s a need for an investigation from Gov. Tim Walz down,” Oz stated, highlighting a serious lack of oversight.

Actions Required by Walz

Oz demanded that Walz take specific corrective measures within 60 days. These include:

• Providing weekly updates to CMS regarding anti-fraud efforts
• Freezing the registration of high-risk service providers for six months
• Verifying the legitimacy of current providers or removing them if necessary
• Submitting a corrective action plan to prevent future fraud

“Failure to implement satisfactory plans will lead to the cessation of federal contributions to these programs,” he warned.

Oz pointed out that two new Medicaid programs in Minnesota have seen sharp increases in costs, such as the Housing Stability Services program, which is expected to greatly exceed its budget, and the Early Intensive Developmental and Behavioral Intervention program, soaring from $3 million in 2018 to nearly $400 million in 2023.

Concerns Over Misuse of Funds

Describing the situation further, Oz remarked, “These scammers have used stolen taxpayer money for extravagant purchases and kickbacks, including enrolling children in fraudulent autism treatment programs. It’s even suspected that some of the funds may have ties to Al Shebab. Why hasn’t Walz acted? Perhaps it’s due to adherence to identity politics,” he critiqued.

He mentioned that Minnesota officials had previously informed CMS of the problem, but the response had been inadequate. “We intervened to shut down the worst program and freeze certain provider enrollments,” he added.

Political Fallout

Oz’s message to Gov. Walz was pressing: “Address the problem within 60 days or start finding spare change. We won’t continue to fund incompetence.” This announcement coincided with President Donald Trump’s recent initiatives aimed at addressing fraud schemes in Minnesota, labeling it as a hub for money laundering and affecting the state’s immigrant policies.

Last week, officials in the Trump administration revealed plans for new investigations, including an inquiry by the Treasury Department into how taxpayer money might have been misdirected to Al Shebab.

Walz’s office has yet to respond to inquiries for comment regarding this matter.