How CMS Built A Medicaid Attack Strategy in 5 Months

What started as a corrective action request to one state has become a nationwide enforcement campaign, and the pattern is worth paying attention to.

In December 2025, CMS flagged concerns in Minnesota's Medicaid program and requested a corrective action plan. Five months later, Dr. Oz has sent letters to all 50 governors demanding provider revalidations, a vice-presidential task force is overseeing anti-fraud efforts at the White House, and CMS has already withheld more than $350 million in Minnesota Medicaid funds and already moved on to a second state.

Here's how we got here.

Minnesota as the Testing Ground

CMS rejected Minnesota's corrective action plan on January 6 and threatened to withhold funds the same day. Within a week, the House Committee on Oversight held its first hearing on fraud in Minnesota. By late January, Energy & Commerce Republicans had launched a formal investigation and written to Governor Walz directly.

Minnesota was clearly the opening act. The administration used it to establish the playbook: identify a state, flag concerns publicly, threaten funding, and hold hearings.

The State-by-State Expansion

Starting in late January, Dr. Oz began sending letters to individual states — California, Maine, New York, and Florida — each focused on specific areas of concern including home and community-based services (HCBS), behavioral health, and provider billing practices. The February State of the Union made the strategy explicit: the President called out Minnesota, California, Massachusetts, and Maine by name and announced VP Vance as the lead of a new anti-fraud task force.

By March, Energy & Commerce Republicans had written to ten states simultaneously. Congressional hearings on Medicaid and Medicare fraud became a near-monthly occurrence.

The National Rollout

On April 23, CMS sent letters to all 50 governors asking states to re-validate providers — with a 10-day deadline for initial timelines and a 30-day deadline for a comprehensive two-year revalidation strategy. It is the broadest administrative action in this campaign to date.

The Next State

On May 13, CMS announced the deferral of $1.3 billion in funds from California. In the announcement, Vice President Vance criticized New York and Hawaii, putting targets on new states.

What Comes Next

Based on the trajectory, we expect CMS to move toward fund deferrals in additional states. New York is clearly a target and likely to be next. The CRUSH RFI, released in late February, signals that CMS is also building longer-term infrastructure to support ongoing fraud enforcement. 

When discussing fraud, Dr. Oz frequently slips in his belief that home and community-based services (HCBS) should be provided by family caregivers for free. The House Oversight Committee will hold a hearing tomorrow on “vulnerabilities in Medicaid waiver programs and we expect more significant action against HCBS in the coming months. 

We will continue tracking this campaign as it develops. Stay tuned for our next update.