WASHINGTON— Vice President JD Vance threatened Wednesday to withhold federal Medicaid funds from any state that fails to crack down on fraud — after blocking $1.3 billion in reimbursements for care at 800 California hospices suspected of bilking taxpayers.
Vance, chairman of President Trump’s anti-fraud task force, made the announcement at a wide-ranging press conference.
“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 said.
VP Vance will announce an ultimatum threatening states if they fail to comply with safeguards.
“We want California to get serious about this fraud.”
The vice president said that letters to all 50 states will threaten to yank funding for state-level Medicare fraud control units — with possible additional withholdings on the table — if they don’t crack down on alleged abuses in the low-income insurance program, which covers more than 75 million people.
“For those states that refuse to get serious about fraud, we’re going to turn off that anti-fraud money. And if we continue to find problems, we can turn off other resources within their state Medicaid programs as well,” he said.
Vance singled out Hawaii and New York as potential next targets.
“We are sending letters that will require [the 50 states] to show that they are effectively and aggressively prosecuting Medicaid fraud in their state. 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,” Vance said.
Vance has warned that California isn’t taking the issue of fraud very seriously. Jonathan Alcorn For CA Post“New York has had nine indictments over the last year — nine indictments. That’s a $100 billion Medicaid program just in New York, and you’ve had nine indictments,” he said.
“Indiana, which has about a third of the population of the state of New York, has had more than four times as many indictments over the same period. Does anybody here seriously think that the good people of Indiana are 12 times more likely to commit fraud than the people of New York? No, of course not.”
Vance said that “what is happening is that the people in the leadership in New York are just not taking the fraud issue seriously. They’re not using these anti Fraud Control Units to actually investigate and indict the fraud.”
The office of Gov. Kathy Hochul (D-NY) did not immediately respond to The Post’s request for comment, nor did the office of Gov. Gavin Newsom (D-Calif.).
Dr. Mehmet Oz said he has received fewer than 20 complaints from 800 California hospice and home-care facilities that have been denied receiving federal reimbursements. Pedro Colo for CA PostAlthough much of Vance’s anti-fraud work has targeted Democrat-led states, he framed his push as a national non-partisan issue and said his own home state of Ohio has had significant issues policing Medicaid.
Dr. Mehmet Oz, the federal administrator of Medicaid and Medicare, said that his agency received fewer than 20 complaints from the 800 California hospice and home-care facilities blocked from receiving federal repayments.
“A third of all hospices, a third of all these programs in the entire country are in Los Angeles. Ask yourself, how is that possible? It’s not. There are not that many people dying in Los Angeles,” Oz said.
“We believe that at least half of the hospices in the entire area around Los Angeles are fraudulent, and today we announced 800 of those hospices have been suspended… We have less than 20 who have complained. We’re not even sure those are legitimate.”
Oz said, “We believe that at least half of the hospices in the entire area around Los Angeles are fraudulent, and today we announced 800 of those hospices have been suspended.” REUTERSOz announced a nationwide moratorium on new hospice and home health-care providers eligible for reimbursement.
“When we squeeze the balloon in California… we know what those fraudsters do. They move to nearby Nevada, next door. Nevada has a seven fold increase in hospice already,” he said.
“There will be no new hospices or home health care open in this country. If you have the program now, you can keep it. You can go to ones that already exist.”
The Post previously first-reported in February that the Centers for Medicare & Medicaid Services would withhold reimbursement of $259.5 million in Medicaid funds for Minnesota for 14 programs identified as having a high risk of fraud, including autism care, at-home rehabilitation, non-emergency medical transports and night supervision.
The Post previously reported that the state of Minnesota withheld $259.5 million in Medicaid funds. Shari L Gross/TNS via ZUMA Press Wire / ShutterstockVance and Oz previously in February announced a national moratorium in new businesses eligible for reimbursement of durable medical devices like canes and wheelchairs through the old-age Medicare program — saying that fraud in that area is suspected to be particularly prevalent in South Florida.
“Red state or blue state, we’re going to go after it,” Vance said Wednesday.
“We are not going to have a generous country if Americans think that they’re paying their taxes not to needy people, but to fraudsters. That’s fundamentally what we’re trying to fix, rebuilding America’s trust.”






