Show Me the Documentation

CMS froze $867 million from California and $199 million from Minnesota over fraud it never proved. It still won't show its own paperwork.

The administration froze more than $1 billion from California and Minnesota and called it fraud. It still has not shown the country a single page of proof.

Imagine sending an invoice for work you finished. The other side refuses to pay. They tell reporters you committed fraud. A journalist asks them to show the fraud, and they say nothing. Then they tell you that you can have your money once you prove your own innocence. Strip away the press conference and you are left with a shakedown that carries a federal seal.

On Tuesday, July 21, that is what happened to two states.

The Centers for Medicare and Medicaid Services stopped payment on roughly $867 million owed to California and about $199 million owed to Minnesota. Health Secretary Robert F. Kennedy Jr. stood next to CMS Administrator Mehmet Oz and said the governors could have the money back once they documented that the payments were legitimate. Kennedy called that “common sense.”

Then Reuters asked the two men for their evidence of fraud. They did not provide any.

That is the case in a sentence. The federal government accused two states of fraud, froze a billion dollars, and handed the public nothing to back it up.

The evidence problem

Oz described Minnesota’s issue as 14 high-risk programs with documentation gaps, and pointed to a payment tied to a deceased patient. He also named a figure. Roughly $3 million in questioned Minnesota payments.

Now set that number next to the check they stopped. They identified about $3 million and they deferred payment on $199 million. Read the fine print and the $199 million is not an accusation that $199 million is fraud. It is a hold on “high-risk” claims until the state produces paperwork. In a courtroom, you bring proof for the amount you take, and you take only what the proof supports. Personal care and home health services sit at the center of the categories they flagged. Those are the programs that keep a disabled adult in her apartment and an aging parent out of a facility. Freeze that line item and the fraud keeps running while the care stops.

Now here’s the problem, and it comes from the government’s own data. In the Payment Error Rate Measurement review CMS released in January, Minnesota’s improper payment rate came in at just over 2.1 percent, against a national average of 6.12 percent. CMS also says in its own fiscal 2025 fact sheet that about 77 percent of Medicaid improper payments nationally trace to insufficient documentation, which it states is generally not a sign of fraud or abuse. Understand what that means. PERM measures billing compliance, not fraud. By that compliance measure, Minnesota outperforms the country. And the administration is treating missing paperwork as if it were proof of theft, when its own agency says missing paperwork usually is not.

Follow the pattern, not the press release

California and Minnesota have Democratic governors. Both were targeted in the spring. Both were targeted again this week. This is the second billion-dollar action against the same two blue states in a matter of months, with the earlier $1.3 billion from California and more than $240 million from Minnesota still sitting frozen and unreturned.

Meanwhile, look at who was left alone. Centene, the largest Medicaid managed-care company in the country, agreed to pay more than $1 billion to settle pharmacy overbilling claims across at least 20 states, all while denying wrongdoing. Not one of those states had its Medicaid funding frozen over it. Bigger dollars, broader footprint, opposite treatment.

Governor Tim Walz put it plainly. He said the math does not add up, and that the administration is punishing children, seniors, working families, and people with disabilities as part of a campaign of retribution. When the enforcement lands only on your political opponents and skips the largest documented overbilling case in the private market, voters can read the tell for themselves.

The people demanding documentation should try producing some

The administration wants receipts from Sacramento and St. Paul. Fair enough. Let’s apply that same standard to the people holding the pen.

Medi-Cal covers about 14 million Californians. That is roughly one in three people in the state, and more than half of all California kids. Minnesota’s Medical Assistance program covers well over a million residents, close to one in four Minnesotans when you include MinnesotaCare. The dollars in dispute flow to the clinics, home-care aides, nursing homes, and community providers who serve those enrollees. Providers do not run on promises. When the cash stops, payroll wobbles, appointments slip, and the smallest home-health agencies, the ones operating on thin margins in rural counties, are the first to buckle. The state can litigate for months. The 78-year-old waiting on a home aide cannot.

Yes, CMS is calling this a deferral rather than a cut. Tell that to a provider who cannot make rent because Washington decided her paperwork looked interesting.

What good faith would actually look like

There is a lawful, adult way to run down real fraud, and none of it requires holding hundreds of millions hostage.

Start with specifics. Minnesota has said it was never told exactly how it fell out of compliance. So hand the state the exact claims and providers in question, in writing, with the findings attached. Release payment on every undisputed claim immediately and escrow only the specific dollars actually flagged. Run those flagged claims through the process that already exists for this, the PERM reviews and the Inspector General audits, on a defined timeline instead of an open-ended freeze. Stand up a joint federal-state integrity task force so both sides audit the same data at the same table. If real fraud surfaces, prosecute it and claw back the exact amount, after due process, the way the law was built to work.

That approach recovers stolen dollars and protects patients. The current approach recovers headlines and punishes the sick. One of those is governing. The other is theater.

So here is the ask, and it is simple. If you are a California or Minnesota resident, call your governor’s office and your two senators this week and tell them to demand the written findings in public and to fight the blanket freeze in court. If you run or rely on a Medicaid provider, document your cash-flow hit now and get it to your state Medicaid agency and your representative, because that record is what wins the lawsuit and pries the money loose. And if a friend shrugs and says it is probably just fraud, send them one line. Show me the documentation. Then watch how fast the conversation changes.

The government picked that standard. Let’s hold every last one of them to it.

And one more thing. Please vote in the midterms and let’s begin the process of restoring equal representation to all Americans regardless if they’re living in a red or blue state.

Mitch Jackson, Esq. | paid subscriber perks

Related post: Republican Senator Rick Scott Walked Away From a $1.7 Billion Health Care Fraud Case. Then He Got a Senate Seat.

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