CMS Takes Action Against Fraud in Medicare and Medicaid Programs
Federal health officials have deferred over $259 million in federal Medicaid funds to Minnesota and temporarily halted certain Medicare supplier enrollments to curb fraud within federal health programs. Announced by Vice President J.D. Vance, Health and Human Services Secretary Robert F. Kennedy Jr., and CMS Administrator Dr. Mehmet Oz at the White House, this initiative is part of a strategic shift aimed at preventing improper payments. The strategy leverages advanced technologies like artificial intelligence to detect potential fraud before funds are disbursed.
Dr. Oz emphasized that the Centers for Medicare & Medicaid Services (CMS) is taking a proactive enforcement stance. With its critical role in ensuring state compliance concerning Medicaid—a program funded by both state and federal contributions—non-compliance with program integrity requirements can lead CMS to withhold or defer federal funds.
In January 2026, CMS warned Minnesota about potential fund withholding unless the state implemented a satisfactory corrective action plan to address identified shortcomings. After reviewing Minnesota’s fiscal year 2025 Medicaid spending, CMS decided to defer the substantial sum due to findings of unsupported or potentially fraudulent claims, including claims related to individuals not meeting required immigration statuses.
The scrutiny extended to areas with unusually high spending such as personal care and home and community-based services. Minnesota now has the opportunity to validate their expenditures. Failure to do so could result in further withholding of federal funds.
Medicare Supplier Enrollment Suspensions
At the same time, CMS announced a six-month enrollment moratorium on new suppliers of Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) under Medicare. This freeze includes new applications and changes in ownership for medical supply companies. The decision is a continuation of previous efforts to intercept fraud in this sector.
CMS plans to enhance transparency by releasing information about providers whose Medicare participation has been revoked. This initiative aims to assist both patients and insurers in making informed decisions.
As part of the CRUSH initiative, CMS is seeking public feedback to further develop anti-fraud measures across various federal health programs, including Medicare, Medicaid, and the Children's Health Insurance Program. The feedback period is open until March 30, 2026.
In the preceding year, CMS identified suspicious activities that led to the suspension of $5.7 billion in Medicare payments and prevented $1.5 billion worth of fraudulent DMEPOS billing. Key actions included denying 122,658 Medicare claims and revoking billing privileges from over 5,500 providers.
For ongoing information about CMS's fraud prevention activities, stakeholders are encouraged to visit CMS’s official website.