Category: Tim walz
The Medicaid fraud problem is not going away
John Locke’s “Second Treatise of Government,” which inspired many of our nation’s founding principles, makes the simple assertion that the basic role of government is to protect the lives, liberty, and property of the consenting governed. Though our federal government has long since strayed from this purpose, opportunities to defend it are always a worthy endeavor.
That is why President Trump’s appointment of Vice President JD Vance to lead a new task force dedicated to rooting out fraud in the United States is a welcome undertaking.
There’s no incentive for states to police fraud: They can’t go over budget, and the feds still pick up the tab for illegitimate claims.
For too long, numerous states have abused federal dollars, failing to ensure that many recipients are even real or qualified for federal funds and leaving taxpayers to pick up the tab. Contrary to the media narrative that the administration is simply on a blue-state witch hunt, the billions of dollars stolen in Minnesota (yet to be returned) tell a different story.
For once, the executive branch is demonstrating proper oversight in the service of the American taxpayer, and it is long overdue.
Federal prosecutors estimate that, across 14 Minnesota Medicaid-funded programs, fraud totals more than $9 billion. That number is half of all federal matching funds allocated to the state since 2018.
It’s often said that taxation is theft. In Minnesota, it appears to be policy.
Correctly, Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, and Vice President JD Vance, have turned off the credit card until Minnesota officials can clean up their act.
Following a January CMS effort to get the state into compliance, the agency is also deferring payment for Q4 of 2025, having identified $259.5 million in fraudulent and illegal claims.
Like clockwork, officials, including Gov. Walz, began to plead on behalf of victims of a potential Medicaid fallout, portraying themselves as the defenders of the very Minnesotans victimized by the fraud they enabled.
In a House Oversight Committee hearing just a few weeks ago, Walz and Attorney General Keith Ellison faced questions with a surprising lack of urgency. When asked if he felt the state’s efforts to return funds were successful, Walz denied culpability: “I can’t speak to that … I don’t have any part in that.”
Despite media outlets defending the state’s “good-faith effort” to make amends, the estimated $80 million returned still falls short of even 1% of the money stolen from taxpayers.
Similarly, Walz refused to elaborate on whether government officials who enabled fraud had been fired. During the Oversight Committee’s investigation, it was revealed that dozens of whistleblowers who reported fraud inside the Minnesota Department of Human Services were retaliated against. Minnesota DHS hired outside entities to investigate staff who fell out of line.
The reason? Dozens of whistleblowers reported that they were told not to say anything about the fraud for fear of being called “racist” or “Islamophobic.”
Not only did Walz and Ellison know about massive welfare fraud in the state, but they went to great lengths to keep it that way, afraid that cracking down on the disproportionate amount of Medicaid fraud in the Somali community would harm them politically.
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David M. Levitt/Bloomberg/Getty Images
This level of fraud is historic. But rather than making a good-faith effort to identify fraud and recover taxpayer funds, Minnesota may become the first state to pursue the unprecedented step of suing CMS instead of using the agency’s internal appeals process. While state officials claim they are at a loss over how to satisfy CMS requirements, doubling down on fraud is doubtlessly not the solution CMS is looking for.
Vance, now tasked with developing a nationwide anti-fraud strategy, should build on CMS’ approach in Minnesota, one that directly targets the root of the problem.
Minnesota, like many states, receives a Federal Medical Assistance Percentage of 90% for adults covered under the ACA expansion. In practice, that means for every dollar the state spends, the federal government contributes nine. States that spend more get more. There’s no incentive for states to police fraud: They can’t go over budget, and the feds still pick up the tab for illegitimate claims, ultimately passing the balance on to taxpayers.
In context, CMS’ Medicaid funding pause in Minnesota functions as a blunt but effective check: no oversight, no money. Should Minnesota decide to bolster program integrity and ensure that Medicaid assistance only goes to Americans who are truly in need, it can confidently spend its cash again with the assurance of federal backing.
In the meantime, every other state would be wise to take note and get its house in order before Vance drops the hammer.
