In a press conference on Wednesday, Vice President JD Vance announced that the Trump administration is withholding $1.3 billion in Medicaid reimbursements from California over fraud concerns in the state. He also said that other states could see their federal funding suspended if they don’t aggressively take action against fraud in their Medicaid programs. 

“We’re announcing that the federal government is deferring $1.3 billion in Medicaid reimbursements from the state of California,” Vance stated, saying that the state “has not taken fraud very seriously.”

He later added, “There are California taxpayers and American taxpayers who are being defrauded because California isn’t taking its program seriously, but also you have people who have been prescribed medications that they don’t even need. They’ve had drugs put into their bodies that they don’t need because fraudsters have actually encouraged false prescriptions and false administration of medications.” 

He said the anti-fraud task force he leads will “aggressively encourage the states to take Medicaid fraud more seriously,” and that they are sending letters to every state’s Medicaid programs “that will require them to show that they are effectively and aggressively prosecuting medicaid fraud in their states. And if they do not aggressively prosecute Medicaid fraud, we are going to turn off the money that goes to the anti-fraud units.”

He also said if problems with fraud continue to arise, “we can turn off other resources within their state Medicaid program as well. Our goal here is not to do that. We don’t want to turn off any money. What we want to do is ensure that people are taking fraud seriously. We want to protect Medicaid. We want to protect Medicare.”

Vance added that each state has its own Medicaid fraud units, but said that states such as Hawaii and New York, which have little or no Medicaid fraud convictions over the past few years, “They don’t think that fraud is a big enough problem. They don’t care about protecting resources and they don’t care about protecting that Medicaid program.” He said that Indiana, which has a third of the population of New York, has had four times as many convictions in the same timeframe. “Does anybody seriously think that the good people of Indiana are 12 times more lilely to commit fraud than the people of New York? No, of course not. That’s absurd.”