The Trump administration announced Tuesday it is withholding more than $1 billion in federal Medicaid reimbursements from California and Minnesota, accusing both states of fraud and noncompliance in high-risk programs including in-home care and personal services. Health and Human Services Secretary Robert F. Kennedy Jr. and CMS Administrator Dr. Mehmet Oz announced the deferrals at a press conference July 21, 2026, characterizing them as temporary: states can recover the funds by providing documentation demonstrating that the payments meet federal requirements.
The freeze covers approximately $867.5 million to California and more than $200 million to Minnesota, for a combined total exceeding $1 billion, according to reporting by Reuters, the Washington Examiner, and the Center Square. Reuters reported that neither Kennedy nor Oz offered specific new evidence of widespread fraud at the press conference.
