Minnesota is appealing a federal decision to withhold more than $2 billion in annual Medicaid funding, a move state officials say could destabilize health care for 1.2 million residents.
The decision was announced by CMS Administrator Dr. Mehmet Oz, who alleged Minnesota failed to adequately address Medicaid fraud. State officials strongly dispute the claim.
“These sweeping allegations are not based on facts,” said John Connolly, Minnesota’s Medicaid director. Since October 2024, the state has expanded audits, halted high-risk programs, increased provider reviews and launched new fraud-prevention measures.
Minnesota formally appealed the decision, triggering a federal hearing process. Connolly warned that cutting funding without full review would disproportionately harm children and families who rely on Medicaid services.
State officials say they remain committed to eliminating fraud while ensuring uninterrupted access to care. Learn more about the actions the state is taking at mn.gov/dhs/program-integrity.
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