Trump Admin Halts $1.3 Billion in Medicaid Payments to California

Vice President Vance spoke about efforts to combat fraud in Maine. (Reuters)
By Yuval Rosenberg and Michael Rainey

Good evening. President Trump and dozens of top U.S. business leaders continued their summit in Beijing today. Both Trump and Chinese President Xi Jinping talked about fostering cooperation between their two nations, though Xi also issued a firm warning on Taiwan, calling the issue "the most important" in China-U.S. relations: "If it is handled properly, the bilateral relationship will enjoy overall stability. Otherwise, the two countries will have clashes and even conflicts, putting the entire relationship in great jeopardy."

Here's what else is happening.

Trump Admin Halts $1.3 Billion in Medicaid Payments to California

Citing concerns about possible fraud, the Trump administration has announced that it is withholding $1.3 billion in Medicaid payments from California and threatening to halt payments from more states if they fail to more aggressively prosecute fraud in their Medicaid programs.

Vice President JD Vance, who has been named the nation's "fraud czar" by President Trump, said Wednesday that the federal government is targeting California because it has failed to take steps to limit fraud.

"There are California taxpayers and American taxpayers who are being defrauded because California isn't taking its program seriously, but also you have people who have been prescribed medications that they don't even need," Vance said at the White House. "They've had drugs put into their bodies that they don't need because fraudsters have actually encouraged false prescriptions and false administration of medications."

The administration took similar steps against Minnesota earlier this year, and Vance said he thinks states led by Democrats are not living up to their obligation to combat fraud.

"Now, we have red states and blue states that go after fraud aggressively," Vance said. "But we also unfortunately have some states - mostly blue states, unfortunately - that do not take Medicaid fraud very seriously."

Vance touted his fraud-fighting efforts in a visit to Bangor, Maine, on Thursday, where he reportedly said that the state was "maybe the bronze medalist" for fraud, behind Minnesota and California.

Vance and Trump have made clear that they will be focused on blue states since Vance got his new assignment in April. "We will call him the 'FRAUD CZAR,' and his focus will be 'EVERYWHERE,' but primarily in those Blue States where CROOKED DEMOCRAT POLITICIANS, like those in California, Illinois, Minnesota (Somalia beware!), Maine, New York, and many others, have had a 'free for all' in the unprecedented theft of Taxpayer Money," Trump said in a social media post at the time.

Targeting California: Dr. Mehmet Oz, who leads the Centers for Medicare and Medicaid Services, said California's Medicaid records have generated "major red flags," raising concerns about $630 million in potentially fraudulent billing, $500 million in home health care services and $200 million in "questionable expenditures" related to healthcare for undocumented immigrants.

"It's the largest deferral we've ever made," Oz said, referring to the $1.3 billion being held back. "We're making it for a good reason."

California state officials pushed back on the announcement, with Attorney General Rob Bonta saying, "Once again, California appears to be targeted solely for political reasons."

Additional actions: Oz announced that, in addition to holding back payments, CMS is implementing a six-month moratorium on new Medicare enrollment for hospices and home health agencies.

In a statement, CMS said that during the moratorium period, it plans to "intensify targeted investigations, deploy advanced data analytics, and accelerate the removal of hospice and HHA providers from the Medicare program that are suspected of committing fraud."

Senators Vote to Withhold Their Own Pay During Future Shutdowns

The Senate unanimously approved a resolution Thursday to withhold senators' pay during future federal government shutdowns. The new rule could - just maybe - provide lawmakers with added incentive to avoid funding lapses like the one that shut down federal agencies for a record 43 days last fall or the one that hit the Department of Homeland Security for an even longer record 76 days this year.

The resolution, sponsored by Republican Sen. John Kennedy of Louisiana, passed by voice vote. Senators voted 99-0 to advance it earlier in the week.

The measure instructs the Secretary of the Senate to hold any pay for senators when one or more federal agencies are shut down. The senators would get their back pay "as soon as practicable" after the shutdown ends.

"This is about shared sacrifice," Kennedy said in a statement. "If senators are going to vote to shut down the government and prevent millions of federal workers from getting paid, they ought to have the same skin in the game. My resolution will ensure that senators aren't the only people receiving their paychecks during a government shutdown."

The new rule will take effect after November's midterm elections, meaning that the senators would still get paid if the government shuts down at the start of the new fiscal year in October. The 27th Amendment to the Constitution says that any change to the compensation of senators or representatives can take effect only after the next House elections. The resolution does not apply to the House.

US Gives $1.8 Billion to UN Humanitarian Agency

U.S. Ambassador to the United Nations Mike Waltz announced Thursday that the Trump administration has pledged $1.8 billion to the UN's Office for the Coordination of Humanitarian Affairs, which organizes responses to emergencies worldwide. The pledge brings total U.S. support of the agency in 2026 to $3.8 billion.

"These funds are for victims of natural disasters, for tsunamis, for earthquakes, for famine - people who are truly in critical need," Waltz said.

The U.S has pushed OCHA to improve efficiency and reduce waste, and Walz said the agency has shown a commitment to reform and has handled previous funding well.

In a statement, the State Department said recent U.S. support for OCHA has been a great success, helping to assist more than 21 million people.

"The United States remains the largest humanitarian donor in the world," the department said, "and we call on other governments and the private sector to increase their contributions to OCHA-managed pooled funds as part of a more efficient and more accountable UN."

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