CMS Chief Dr. Oz Issues 60-Day Ultimatum to Minnesota Over Medicaid Fraud Allegations
ST. PAUL, Minn. — Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services (CMS), delivered a stark warning to Minnesota Governor Tim Walz on Friday, demanding immediate action to address a sprawling Medicaid fraud scheme that allegedly siphoned more than $1 billion from the state’s program. Oz’s ultimatum gives Minnesota 60 days to “restore the integrity” of its Medicaid system or risk losing federal funding critical to the program’s operation.
In a public statement posted on X, Oz described the fraud as unprecedented in Medicaid history, involving “bad actors” primarily within Minnesota’s Somali community. He further alleged that some of the stolen funds “may have even made its way to the Somalian terrorist group al-Shabab,” raising national security concerns. “Our staff at CMS told me they’ve never seen anything like this in Medicaid — and everyone from Gov. Tim Walz on down needs to be investigated, because they’ve been asleep at the wheel,” Oz said.
The CMS administrator outlined a series of corrective measures that the state must implement within the next two months. These include sending weekly updates on anti-fraud efforts to CMS, freezing enrollment of high-risk providers for six months, verifying the legitimacy of all current providers, and submitting a comprehensive corrective action plan to prevent future fraud. “If we’re unsatisfied with the state’s plans or cooperation, we’ll stop paying the federal share of these programs,” Oz warned.
Oz highlighted two Medicaid programs that have seen dramatic and suspicious cost increases in recent years. The Housing Stabilization Services program, initially projected to cost $2.6 million annually, paid out more than $100 million in 2024 alone. Meanwhile, the Early Intensive Developmental and Behavioral Intervention program’s expenditures ballooned from $3 million in 2018 to nearly $400 million in 2023.
According to Oz, the fraudsters used stolen taxpayer money to purchase luxury cars, overseas real estate, and to offer kickbacks to parents who enrolled children in fraudulent autism treatment centers. The scale and audacity of the scheme have drawn comparisons to historic scandals. “So why didn’t Walz stop them? That’s simple: because he went all-in on identity politics,” Oz charged.
While Minnesota officials reportedly alerted CMS about the fraud, Oz criticized the state’s response as inadequate. The CMS demands come amid heightened federal scrutiny of Medicaid programs nationwide, as improper payments have strained resources and undermined trust in public health systems.
Medicaid, jointly funded by federal and state governments, provides healthcare coverage to millions of low-income Americans. The Centers for Medicare & Medicaid Services oversees the program nationally, ensuring states comply with federal rules and maintain program integrity.
Governor Walz has yet to issue a detailed public response to Oz’s ultimatum. However, the threat of losing federal Medicaid funds could have significant repercussions for Minnesota’s healthcare infrastructure, especially for vulnerable populations relying on these services.
This development follows ongoing investigations into Medicaid fraud in Minnesota, including congressional inquiries. Representative James Comer, chair of the House Oversight Committee, has recently targeted Walz’s administration, citing the alleged $1 billion fraud as evidence of mismanagement.
Experts note that Minnesota’s Somali community, one of the largest in the United States, has been under intense scrutiny due to these allegations. Community leaders have condemned the fraud and emphasized the importance of distinguishing criminal activity from the broader population.
As the 60-day deadline approaches, Minnesota faces mounting pressure to demonstrate effective oversight and accountability. Failure to comply could result in the federal government withholding millions in Medicaid funding, potentially disrupting care for thousands of residents.
For further information on Medicaid program integrity and federal oversight, visit the Department of Health and Human Services and the Office of Inspector General websites. Updates on federal healthcare funding and policy can also be found at the U.S. Congress official site.
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