Officials Decry Retribution as Vance Defers $1.3B in Medicaid Payments to CA

"Political retribution, plain and simple," was how US Sen. Alex Padilla described an announcement by Vice President JD Vance late Wednesday regarding the White House's decision to withhold $1.3 billion in Medicaid reimbursement payments to California. Vance and Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, claimed the state's Medicaid records have generated "red flags" and demanded officials clarify $630 million in billing, $500 million that's been spent on home health services, and $200 million in what Oz called "questionable expenditures," which he claimed had been used to provide coverage for undocumented immigrants, who are not eligible for Medicaid."

"The announcement came a month after Vance's federal anti-fraud task force suspended the licenses of nearly 450 hospice care facilities and 23 home health agencies in the Los Angeles area, accusing them of fraud. Vance also warned that all 50 states could soon see federal funding for their Medicaid Fraud Control Units frozen if they fail to "aggressively prosecute Medicaid fraud.""

""We can turn off other resources within their state Medicaid programs as well," said the vice president. California Gov. Gavin Newsom, who has frequently sparred with the Trump administration, said Vance and Oz were "attacking programs that keep seniors and people with disabilities OUT of nursing homes," which are far more expensive to run than home healthcare agencies."

"Newsom said the growth of the state's In-Home Supportive Services program has saved taxpayers "$107,000 per person" by reducing reliance on nursing homes."

The White House announced it would withhold $1.3 billion in Medicaid reimbursement payments to California. Vice President JD Vance and CMS administrator Mehmet Oz said California Medicaid records show “red flags” and demanded clarification of $630 million in billing, $500 million spent on home health services, and $200 million in expenditures described as questionable. Oz claimed some spending was used to provide coverage for undocumented immigrants, who are not eligible for Medicaid. The announcement followed a federal anti-fraud task force action that suspended licenses of nearly 450 hospice facilities and 23 home health agencies in Los Angeles. Vance warned that federal funding for Medicaid Fraud Control Units could be frozen in all 50 states if Medicaid fraud is not aggressively prosecuted. California Governor Gavin Newsom criticized the move as attacking programs that keep seniors and people with disabilities out of nursing homes and cited cost savings from in-home supportive services.

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