Vance announces suspension of $1.3 billion in Medicaid funding to California over fraud concerns

Vice President JD Vance and Dr. Mehmet Oz, the head of the Centers for Medicare and Medicaid Services.

Vice President JD Vance announced the federal government is pausing more than a billion dollars in Medicaid funding to the state of California over suspicions of fraud.

"California has not taken fraud very seriously," Vance told reporters at a press conference on Wednesday in Washington, D.C., where he announced the funding freeze along with several other measures aimed at reducing fraud. "There are California taxpayers and American taxpayers who are being defrauded because California isn't taking its program seriously." All told, $1.3 billion in Medicaid funding to California will be put on hold, the vice president said. 

Vance said the fraud manifests in numerous ways including doctors making unnecessary drug prescriptions as well as hospice businesses accepting Medicaid funds, but not actually providing any hospice services. President Trump appointed Vance as his "fraud czar" earlier this year. In addition to the suspended Medicaid funding, Vance announced a freeze on some new Medicaid enrollments for the next six months, giving California and other states time to investigate fraud, the Associated Press reported. 

"We believe that over half of the hospices in the Los Angeles area are fraudulent," Dr. Mehmet Oz, the head of the Centers for Medicare and Medicaid Services, said at the Wednesday press conference. "Today we announced 800 of those hospices have been suspended." Oz went on to say that since the federal government began shutting down the hospices, his department hasn't received any calls from the owners or administrators of those business inquiring as to why their federal funding was being cut off, which he said was a telltale sign that the business aren't legitimate. 

California Gov. Gavin Newsom's press office denied there was large-scale fraud happening in the Golden State, in a response on X. "We hate fraud. But that’s NOT what this is. Vance and Oz are attacking programs that keep seniors and people with disabilities OUT of nursing homes," Newsom's spokespeople said. “We’d like the state to at least come to the table and explain to us how these outlier payments have been generated,” Oz said during the press conference.

Below, watch a clip of some of the remarks as well as other examples of fraud that have been expose.