Vice President JD Vance issued a warning on May 13, 2026, that states could potentially have their federal funding cut off if they do not aggressively pursue Medicaid fraud, ratcheting up the Trump administration’s pressure on governors and state Medicaid officials. “We are sending letters that will require them to show that they are effectively and aggressively prosecuting Medicaid fraud in their states,” Vance said during a news conference on fraud.
And if they do not, if they do not aggressively prosecute Medicaid fraud, we are going to turn off the money that goes to these anti-fraud units,” the vice president added. Vance went on to say the federal government has provided states with “billions of dollars” for Medicaid Fraud Control Units and warned that funding could be slashed or completely cut off if states didn’t fulfill their duties to crackdown on fraud.
He then noted many states have already received billions of dollars in federal funds to protect citizens from rampant fraud happening across the country, yet they have not produced a conviction or an indictment. The vice president’s stern warning came as the administration revealed that it will be deferring $1.3 billion in Medicaid reimbursements from California. Vance said the deferment was the result of the Golden State’s failure to take fraud seriously, according to Fox News.
California officials, unsurprisingly, disputed those claims. “We’re announcing that the federal government is deferring $1.3 billion in Medicaid reimbursements from the state of California. And the simple reason is because the state of California has not taken fraud very seriously,” Vance continued. The vice president then praised Ohio, a red state, and Maryland, a blue state, as examples of states his task force has been working with that are taking “fraud seriously.”
Ohio Republican Gov. Mike DeWine put out a press release on the same day announcing several new measures the Buckeye State is taking to crack down on suspected fraud. One of the new measures proposes a six-month moratorium on new home healthcare and hospice providers enrolling in the Medicaid program. Vance then pointed out several Democrat-run states that are not doing their part to tackle fraud.
“This does not have to be a red state or a blue state issue. This is just basic good government. However, states like California, states like Hawaii, states like New York have completely not taken the fraud issue seriously in the Medicaid program. And, so, for those states that refuse to get serious about fraud, we are going to turn off that anti-fraud money,” Vance explained.
The vice president then stated that if states don’t start taking the problem of fraud more seriously, other resources within their Medicaid programs could be denied funding as well. “We don’t want to turn off any money. What we want to do is ensure that people are taking fraud seriously. We want to protect Medicaid,” he continued.
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“We want to protect Medicare, but we can’t do that if the states that are administering those programs are allowing those programs to be fleeced by fraudsters,” the vice president added. Dr. Mehmet Oz, the Administrator for the Centers for Medicare & Medicaid Services, previously gave both governors and state Medicaid leaders 10 business days on April 23 to inform his agency if they will commit to a “revalidation” of high-risk Medicaid providers.
“While the factors contributing to fraud are multifaceted and require a comprehensive approach to address, a revalidation process for high-risk providers will immediately deter criminal actors from continuing their fraud schemes, as the federal and state governments closely review and scrutinize the qualifications of providers to suspend or terminate clearly abusive actors from the program,” Oz stated in a letter.
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