On Tuesday, the Centers for Medicare & Medicaid Services (CMS) announced it deferred $1.2 billion in Medicaid payments to California directed toward personal home care services.
The news follows CMS’ July deferral of over $1 billion in Medicaid payments for certain Medicaid claims, including personal care and home-based services, in Minnesota and California.
“The devastating blow to fraud that is being levered right now into even bigger actions is not done yet,” Dr. Mehmet Oz, CMS administrator, said during an Oval Office briefing. “We have at least two more years of hard work to do on this.”
Standing next to Oz was Nick Shirley, a 23-year-old right-wing content creator on YouTube who, in December 2025, alleged that Minnesota child daycares run by immigrants were committing fraud.
Oz said the content creator also found potential fraud in California, prompting CMS to investigate further in California.
“Fraud in Minnesota rhymes with fraud in California, where Nick went next,” Oz said, adding that Shirley purported to find financial abuse in home health services, adult daycare and hospice providers in California as well.
Oz questioned the growth of California’s personal care services, stating that California pays substantial amounts of money for caregivers to provide daily services, such as carrying groceries upstairs for a loved one.
Oz stated that California’s personal care services grew by over 24% within the last three years, double the rate of other state averages across the country.
“[It is] impossible for us to understand how that could be,” Oz said. “So we’re taking major action in California again.”
Oz attributed the Medicaid crack down to the anti-fraud task force established in March and led by Vice President JD Vance, as well as collaboration from other members of the Trump administration.
“All of a sudden, the usual walls between the siloed institutions of government break down and we make change happen,” Oz said. “We just need a little more time to get it done.”
Sen. Alex Padilla, D-Calif. decried the deferral in a statement shared with the Los Angeles Times.
“This decision will hurt older Californians, people with disabilities and those recovering from illness or injury,” Padilla said, according to the outlet.
CMS’ fraud crackdown
Oz’s focus on fraud in California repeats prior talking points about preventing fraud, waste and abuse in the state.
For instance, in July, Oz also said that California’s claims for in-home care programs exceeded national trends for spending growth. After identifying spending growth that far exceeded national trends and claims that require additional documentation, CMS implemented a review of certain California in-home care programs.
The agency also reviewed Medicaid claims in 14 high-risk service areas in Minnesota. CMS found claims requiring additional information, including expenditures linked to providers flagged through program integrity reviews, as well as additional billing concerns.
“CMS is done trying to chase down stolen and misused funds after they’ve already left the building,” Oz said in a statement. “That’s why we’re deferring payments with respect to certain high-risk services within the Medicaid programs in California and Minnesota as part of our proactive new approach to program integrity.”
California’s Medicaid spending ranked the highest of any U.S. state in 2024, according to a report from KFF, a San Francisco-based non-profit conducting health policy research.
CMS’ Medicaid deferrals align with broad crackdowns on fraud in the home-based care industry.
“Medicaid exists to serve vulnerable Americans — not to bankroll unsupported claims,” said Department of Health and Human Services Secretary Robert F. Kennedy, Jr. in a July statement. “States that receive federal Medicaid funding must demonstrate that every dollar meets federal requirements. When they cannot, we will not release federal funds until they do.”
Aside from Medicaid, CMS has also cracked down on fraudulent activity in Medicare home health services. In May, the agency enacted a nationwide freeze on both Medicare home health and hospice enrollment to mitigate the entry of bad actors and prevent illegitimate billing.
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