Mehmet Oz, who oversees the Medicaid and Medicare programs, said during a news conference that Minnesota's government, led by 2024 Democratic vice presidential candidate Tim Walz, has not done enough to prevent abuses.
This is another element of the dispute between the Trump administration and Walz this year over Medicaid fraud. Medicaid is a joint state-federal program that provides health insurance to low-income people and people with disabilities.
Minnesota has also been at the center of Democratic resistance to President Donald Trump's mass deportation campaign. Federal agents killed two protesters in the state earlier this year, prompting congressional Democrats to halt funding for the Department of Homeland Security starting in February. Lawmakers agreed to fund most of the department three weeks ago after a record-long government shutdown. Republicans plan to soon pass a party bill providing funding for the department's immigration unit.
In a statement to POLITICO, Walz said people committing fraud in Minnesota “get caught and go to jail.”
James Clark, inspector general for the Minnesota Department of Human Services, said his department has been working for months with “experienced federal and state partners” to help build criminal cases against most of the people charged.
In an emailed statement, Clark said his department had stopped payments to some of the companies linked to today's allegations more than a year ago and had opened investigations and withheld payments against 11 of the 15 defendants.
Health Secretary Robert F. Kennedy, who appeared at the news conference with Oz and Deputy Attorney General Colin McDonald, said the arrests amounted to “the largest autism fraud exposure in American history.”
McDonald said the defendants allegedly misappropriated funds intended to help homeless people, provide services for children with autism and support people with disabilities to live independently. Two of the defendants were accused of paying bribes to parents to bring their children to diagnostic centers where the children were given autism diagnoses regardless of actual medical need, and then billed for services that were never provided.
According to McDonald, one of the patients, who was supposed to receive 24-hour care but did not, was later found dead.
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Why is it important?
Walz, who was a 2024 vice presidential candidate alongside Kamala Harris, has become one of the administration's top targets in the fight against fraud. His condition gained notoriety in 2025 when the housing program was closed due to rampant abuses. Walz later decided not to seek re-election.
This year, Oz's agency – the Centers for Medicare and Medicaid Services (CMS) – withheld more than $300 million in Medicaid payments from Minnesota over concerns about possible abuses. The state filed a lawsuit against CMS, claiming the holdouts are larger than usual and politically motivated.
In January, CMS tried to withhold $2 billion. future Medicaid payments to the state, arguing that Minnesota isn't doing enough to prevent fraud. The move was based on a federal authority that CMS had never previously used.
However, CMS paused these efforts after it approved Minnesota's anti-abuse plan in March.
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What's next?
Minnesota has committed to re-screening all high-risk healthcare providers by May 31, including those offering in-person or home care.
Of the 5,600 suppliers verified, 40 percent has not responded or provided insufficient information as of May 7 – Oz announced during the press conference.
“We believe half of these providers may be unable to provide services by the end of the month,” he said.
CMS is also starting to look at Medicaid funding in other states. Earlier this month, it announced a deferral of a $1.3 billion payment. for California, saying the state hasn't done enough to combat hospice abuses. California authorities denied these allegations, describing them as political.
The agency has made it a nationwide requirement for all states to report on the activities of their Medicaid anti-fraud units.
CMS is also asking states to develop plans to re-verify healthcare providers providing services susceptible to abuse.
