Vice President JD Vance said that at President Donald Trump’s direction, a pause on federal Medicaid reimbursements going to Minnesota would take place as part of a “war on fraud.”
Vance was joined by Centers for Medicare and Medicaid Services Administrator Mehmet Oz on Wednesday in announcing that the pause on Medicaid payments was directed toward Minnesota as the state undergoes ongoing fraud investigations into day care centers, among other issues involving the use of federal funds.
“We have decided to temporarily halt certain amounts of Medicaid funding that are going to the state of Minnesota in order to ensure that the state of Minnesota takes its obligation seriously to be good stewards of the American people’s tax money,” Vance said.
This came just a day after Trump sharply criticized Minnesota during his Tuesday evening State of the Union address.
“There’s been no more stunning example than Minnesota, where members of the Somali community have pillaged an estimated $19 billion from the American taxpayer,” he said, later adding, “This is the kind of corruption that shreds the fabric of a nation, and we are working on it like you wouldn’t believe.”
“So tonight, although started four months ago, I am officially announcing the war on fraud to be led by our great vice president, JD Vance,” Trump continued. “He’ll get it done. And we’re able to find enough of that fraud.”
The state, which has seen turmoil since the start of the year, with federal agents conducting immigration enforcement that has been met with protests, has also seen a rising number of Republican allegations about fraud.
Minnesota Gov. Tim Walz ultimately dropped his reelection bid over fraud allegations at child care facilities in the state. The U.S. Department of Health and Human Services said it would freeze all federal child care payments in the state but the state’s Department of Children, Youth and Families said investigators say facilities should be operating as expected.
Walz has admitted that the scandal, which could amount to about $1 billion, was his fault and that he will be “the one that will fix it.”
The Department of Justice has brought charges against dozens of Minnesotans over alleged Medicaid fraud as well.
Wednesday’s announcement from Vance and Oz ramps up federal threats toward the state.
“A lot of people are getting rich off the generosity of American taxpayers,” Vance said. “But more fundamentally, and more importantly than that, it means that there are kids in Minnesota who deserve these services, who need these services, and they’re not going to those kids. They’re going to fraudsters in Minneapolis. That is unacceptable. And that’s the sort of thing that we’re cutting off with this action today.”
Oz said that the administration would be cutting $259 million of deferred Medicaid payments in Minnesota, based on an audit of the last three months of 2025.
“We have notified the state and said that we will give them the money, but we’re going to hold it and only release it after they propose and act on a comprehensive corrective action plan to resolve the problem,” he said.
Oz said Walz has 60 days to respond to a letter the administration sent to him on the matter.
Walz: Medicaid freeze is ‘retribution’
In a post online, Walz said the administration’s action “has nothing to do with fraud.”
“The agents Trump allegedly sent to investigate fraud are shooting protesters and arresting children. His DOJ is gutting the U.S. Attorney’s Office and crippling their ability to prosecute fraud. And every week Trump pardons another fraudster,” he said.
“This is a campaign of retribution. Trump is weaponizing the entirety of the federal government to punish blue states like Minnesota,” Walz added. “These cuts will be devastating for veterans, families with young kids, folks with disabilities, and working people across our state.”