President Trump declared a “war on fraud” during his State of the Union address, and Vice President JD Vance wasted no time showing he meant business.
Less than 24 hours after being tapped to lead the nationwide crackdown, Vance stood alongside Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, and announced that $259.5 million in Medicaid funds for the state of Minnesota will not be reimbursed due to fraud concerns.
That is not pocket change. That is more than a quarter of a billion dollars.
Vance did not sugarcoat it. “We are going to start very aggressively in the administration cracking down on the people and the organizations that are defrauding Americans,” he said. He added that “a LOT of people were getting rich off the American taxpayer” and pointed to cases where money intended for autism services for children was allegedly diverted to fraudsters in Minneapolis.
The message was clear. The days of rubber stamping federal reimbursements without accountability are over.
According to reporting from the New York Post, Minnesota Governor Tim Walz now has 60 days to submit a detailed corrective action plan if he wants the funds restored. Dr. Oz made that deadline explicit. “Gov. Tim Walz has 60 days, 60 days, sir, to respond to our letter,” Oz said. To regain repayment, the state must “propose and act on a comprehensive corrective action plan to solve the problem.”
If Minnesota fails to comply, the consequences could escalate. Oz warned the state could rack up $1 billion in deferred payments this year if systemic issues are not addressed.
The administration also announced a national pause on firms seeking Medicare subsidies for durable medical equipment such as canes and walkers. That sector has long been vulnerable to abuse, with questionable billing practices costing taxpayers billions over the years.
This move signals a broader shift in tone from Washington. Instead of simply increasing funding and hoping for better results, the administration is tying federal dollars to accountability and performance. Medicaid is jointly funded by federal and state governments, which means taxpayers across the country are on the hook when fraud slips through the cracks.
Critics will likely frame this as political targeting of a Democratic governor. Supporters argue it is basic stewardship of public funds. Fraud in entitlement programs is not a partisan issue. It is a math problem. Every dollar siphoned off by a scam operation is a dollar not reaching vulnerable Americans who legitimately need services.
Minnesota now faces a choice. Clean up its oversight systems and demonstrate meaningful reform, or risk losing additional federal support.
The broader implication is that other states should take notice. If this truly is a war on fraud, Minnesota may simply be the first battlefield.
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