Trump admin freezes more than $1 billion in Medicaid funds

The Trump administration is halting more than $1 billion in federal Medicaid payments to California and Minnesota until the states take more steps to investigate questionable claims, federal health officials said on Tuesday.

Why it matters: The moves continue a series of freezes to blue states' funding as part of the administration's crackdown on fraud.

• They also maintain scrutiny of Minnesota's safety net funding after the administration used the state's inability to rein in fraud as justification for launching last year's ICE enforcement surge.

Driving the news: The Centers for Medicare and Medicaid Services said it's deferring about $867.5 million in Medicaid payments to California and $199 million to Minnesota after financial reviews turned up unsupported claims for in-home care.

• The Department of Health and Human Services said it also will expand its authority to remove bad actors from federal health programs and possibly bar them from returning.
• CMS said it reviewed California's claims for certain in-home care programs after identifying spending growth that exceeded national trends and other claims officials said require more documentation.
• The agency also cited Medicaid claims in 14 service areas in Minnesota that it said require additional documentation, including expenditures linked to providers who had been flagged through program integrity reviews.

"CMS is done trying to chase down stolen and misused funds after they've already left the building," said CMS Administrator Mehmet Oz, adding the moves would safeguard federal taxpayer dollars.

Context: In May, CMS announced it would defer $1.3 billion in Medicaid funds to California, in what Oz said at the time was the biggest deferral ever made by the agency.

• Officials also said they were imposing a six-month moratorium on enrolling new hospice and home health providers in Medicare, which it identified as key areas of fraudulent activity.

This is a developing story. Check here for updates.