The 50 states get “many, many billions of dollars” from the federal government to fight Medicaid fraud and – if they can’t show they’re effectively and aggressively fighting fraud – they’ll lose those payments, Vice President JD Vance said Wednesday.
At a press conference reporting on the administration’s anti-fraud initiatives, Vance said many states, both Blue and Red, aren’t taking Medicaid fraud seriously.
While the federal government pays most of the money for Medicaid, the program is actually administered by 50 independent states systems, each of which is policed by a separate, federally-funded state Medicaid Fraud Control Unit (MFCU).
“The federal government generously gives these fraud control units many, many billions of dollars across the United States of America so that they can take care of Medicaid fraud seriously” – but, that’s not what they’re doing – Vance explained.
Despite the federal taxpayer money they receive to indict and convict Medicaid fraudsters, states like California, New York and Hawaii are ignoring the problem.
In Hawaii, for example, the anti-fraud unit has not obtained a single indictment or conviction in recent years “because the administrators of the Hawaii program just don’t take the problem seriously,” Vance noted.
“You’ve have had, effectively, free reign from government of Hawaii to commit as much fraud as you want. That is a complete disgrace,” Vance said.
As a result, “We are going to very aggressively encourage the states to take Medicare fraud more seriously,” the vice president said, warning that states that don’t prove they’re properly policing fraud will lose federal government funding:
“Today, we are sending across 50 Medicaid programs, we are sending letters that will require them to show that they’re effectively and aggressive prosecuting Medicaid fraud in their states.
“And if they do not, if they do not aggressively prosecute Medicaid fraud, we are going to turn off the money that goes to these ant-fraud units.”
.@VP: "Today, we are sending, across 50 Medicaid programs, letters that will require them to show that they are effectively and aggressively prosecuting Medicaid fraud in their states—and, if they do not... we are going to turn off the money that goes to these anti-fraud units." pic.twitter.com/8ii4K1FnpR
— Rapid Response 47 (@RapidResponse47) May 13, 2026
“These letters are the first step, the first effort to try to force these states to get serious about prosecuting fraud,” Vance said, explaining that anti-fraud funding isn’t the only thing states have to lose if they don’t start cracking down on Medicaid fraud:
“For those states that refuse to get serious about fraud, we’re going to turn off that anti-fraud money.
“And, if we continue to find problems, we can turn off other resources within their state Medicaid programs, as well.”
To set an example of the consequences states face, the vice president announced that the federal government is deferring $1.3 billion in Medicaid payments to California. “The simple reason is that the state of California has not taken fraud very seriously,” Vance explained.
.@VP: "We're announcing that the federal government is deferring $1.3 billion in Medicaid reimbursements from the state of California — and the simple reason is because the state of California has not taken fraud very seriously." pic.twitter.com/o3JGiKwP3K
— Rapid Response 47 (@RapidResponse47) May 13, 2026
