Trump administration widens its anti-fraud efforts with a Medicaid probe in New York

President Donald Trump’s administration has expanded its crackdown on state Medicaid programs, launching a fraud investigation in New York just one week after freezing nearly $260 million in Medicaid funding to Minnesota over similar concerns.

Centers for Medicare and Medicaid Services (CMS) Administrator Dr. Mehmet Oz announced the probe Tuesday, stating that federal officials have identified concerning trends in New York’s Medicaid program. The administration has demanded that state officials provide details about their handling of fraud, waste, and abuse within 30 days or risk having payments deferred.

“Heart surgeons are trained to look at the numbers,” said Oz, a former celebrity heart surgeon. “Right now, the numbers coming out of New York’s Medicaid program don’t add up.”

This investigation is part of a broader administration initiative to address alleged fraud nationwide, which federal officials claim is necessary to control excessive spending and protect taxpayers. With affordability concerns prominent among midterm voters, Trump has intensified these efforts, announcing that Vice President JD Vance would lead a national “war on fraud” aimed at balancing the federal budget.

In a letter to New York Governor Kathy Hochul, Oz wrote that the state’s spending levels combined with “serious concerns” about its oversight of certain Medicaid services demand “immediate investigation, corrective action and enhanced transparency.” The letter specifically highlighted concerns about the high proportion of New York Medicaid beneficiaries receiving personal care services for daily living activities like bathing, grooming, and meal preparation.

New York’s Medicaid costs have long been problematic for state leadership. The program, which provides health care for approximately one-third of New Yorkers, cost $115.6 billion in the 2025 fiscal year and spends more per person than Medicaid programs in any other state.

When asked about Oz’s letter on Wednesday, Hochul suggested the investigation was politically motivated. “I will have to stand up and show them the truth and show them the facts, that they’re wrong. When there is fraud I will help them fight it,” she told reporters. Her office characterized the investigation as an attempt by the Trump administration to strip healthcare from everyday New Yorkers.

CMS defended its actions, stating that ensuring state compliance with federal rules is “a core part of the agency’s federal oversight role.”

The New York investigation follows a pattern of similar actions against Democratic-led states. Last week, CMS halted Medicaid payments to Minnesota, with Oz stating that funding would resume only after the state implements “a comprehensive corrective action plan.” The administration had previously cited alleged fraud involving day care centers operated by Minneapolis-area Somali residents as justification for enforcement efforts in that state.

Minnesota Governor Tim Walz called the funding freeze “targeted retribution” and on Monday filed a lawsuit against the Trump administration over the deferred payments. The state is also appealing a CMS decision to withhold $2 billion in annual Medicaid funds announced in early January.

Earlier this year, Oz sent letters to Democratic governors in Maine and California demanding additional information or corrective action regarding alleged fraud in government health programs. Maine Governor Janet Mills responded by calling the request “a political attack” and stated she would not be intimidated by the administration.

This approach to withholding funds from Democratic-led states citing fraud concerns has become increasingly common under the Trump administration. Similar actions have targeted child care subsidies and other social services in Minnesota, New York, and three other states, as well as the Supplemental Nutrition Assistance Program in 22 states that have declined to provide data the federal government claims is necessary to detect fraud.

In both cases, however, judges have ruled that funding must continue to flow for now, temporarily blocking the administration’s efforts to withhold payments.

Democratic state officials have consistently characterized these moves as politically motivated attacks that could potentially disrupt critical healthcare services for millions of low-income Americans who depend on the safety net programs.