Minnesota Plays Victim Card As Trump Admin May Turn Off Medicaid Spigot Amid Fraud Probe

Minnesota public officials are preparing for the Trump administration to pull hundreds of millions in federal funding from the state which has been marred by a massive healthcare fraud scandal in recent months.

A government official appointed by Democratic Minnesota Gov. Tim Walz expressed his concern with the Center of Medicare & Medicaid Services (CMS) and Health & Human Services (HHS) for freezing $550 million in federal funding in 2026, claiming the state’s Medicaid program is being unfairly targeted in fraud implications, the Washington Sun reported. The Trump administration froze the funding due to allegations of widespread fraud in the state that first broke in late 2025.

While members of Walz’s administration concede there is some level of fraud present in the Medicaid program, they claim the exact scope of the problem is difficult to calculate, and are seeking clarification from the Trump administration on what grounds they have for deterring funds, the outlet reported.

Walz appointed John Connolly as Minnesota Department of Human Services’ (MN DHS) temporary commissioner and state Medicaid director in May. Connolly said his department is ready to act on any “credible allegations of fraud,” but that the pressures put on by the Trump administration “feel increasingly like a war on Medicaid, not a war on fraud,” according to the Sun.

“We are deeply concerned that this would be another step in a retribution campaign for Minnesota that was promised very publicly,” Connolly according to the outlet.

Connolly sent a five-page letter to CMS administrator Dr. Mehmet Oz on Oct. 2, seeking for federal funding to be resumed, claiming the state’s DHS had sufficiently met its fraud reporting requirements by identifying 14 “high risk” Medicaid service providers, and thereby sufficiently complying with CMS.

“Minnesota has repeatedly asked CMS and federal law enforcement to provide evidence supporting public claims of of fraud in Minnesota’s Medicaid programs so the Department of Human Services can stop payments where warranted,” Connolly’s letter read. “To date, no such evidence has been shared with the Department of Human Services. Nor has CMS requested that the Minnesota Department of Human Services impose a payment withhold on any provider.”

“The Minnesota Department of Human Services is acting aggressively to detect and prevent fraud and shuts off money to providers when credible allegations of fraud come to light,” the MN DHS said in a statement to the Daily Caller News Foundation. “We do this work in close partnership with other state agencies and law enforcement.”

The Department did not appear to address what specifically it is doing to mitigate fraud in the state when asked by the DCNF.