Under Title XIX of the Social Security Act the executive branch of the federal government is empowered to withhold Medicaid funds from a state following prior notice and a public hearing. At the Minnesota Star-Tribune Sydney Kashiwagi and Jessie Van Berkel report that the White House has “paused” Medicaid reimbursements to Minnesota:
The Trump administration announced Wednesday it plans to halt $259 million in Medicaid payments to Minnesota over concerns about fraud in the state’s social services programs, the latest chapter in the federal government’s crackdown on the state.
The announcement comes one day after President Donald Trump’s State of the Union address, where he zoomed in on fraud in Minnesota and announced Vice President JD Vance would be leading efforts to combat the issue. It also follows the wind-down of Operation Metro Surge, an immigration crackdown in the state initially prompted by allegations of fraud.
“A quarter billion dollars is not going to be paid this month to Minnesota for its Medicaid claims,” Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz said alongside Vance in a Washington, D.C., news conference.
The administration said it would withhold the funds until the Walz administration puts together a “comprehensive corrective action plan to stop the problem.”
I think that distinguishing between “pausing” and “withholding” is splitting hairs. Is this action substantively a withholding, regardless of the label? If the executive branch can avoid statutory procedural safeguards simply by relabeling a withholding as a “pause,” then the statutory protections are illusory. I have no objection to the administration’s investigation of Medicaid fraud in Minnesota but I do think it should follow the letter of the law, that is it should issue a warning and conduct a public hearing.
Dave Schuler: Is this action substantively a withholding, regardless of the label?
It’s similar to how, if Trump feels irritated by the Swiss “prime minister”, he can impose tariffs under an emergency law.
Of course there is no reason to believe the fraud is worse in Minnesota than elsewhere. One of the weaknesses of our form of government has become glaringly obvious. A POTUS can act on their whims with little standing in their way. At best it goes to the Supreme Court in a year or two.
Steve
The context that is missing is what is announced today isn’t the start of the process.
From Minnesota reformer it looks like the Federal Government already sent notices last fall and there’s been an appeal of decisions to halt payments since early January. It looks like its following the “corrective action plan” process.
To follow up on Curious’ comment, the Governor was given notice of this action on January 6th, and this came with the opportunity to request a hearing to be held in 30-60 days. It looks like a hearing was requested, which I would expect to more like submission of documents than evidentiary trial. I don’t see whether the hearing was held yet.
I don’t see any importance as to how the action is termed; it’s intended to be temporary or conditional. (Also, note from Curious’ link that Minnesota withheld Medicaid funds to the worst actors itself)
https://www.federalregister.gov/documents/2026/01/14/2026-00512/notice-of-opportunity-for-hearing-on-compliance-of-minnesota-state-plan-provisions-concerning