<p>Dr. Mehmet Oz, administrator of the Centers for Medicare &amp; Medicaid Services, announced Tuesday that Medicaid payments to 14 programs in Minnesota will be deferred, and that a sweeping audit of those federally funded programs is underway, as the Minnesota fraud scandal and the response from the Trump administration continue to escalate.</p>
<p>“The more we uncover, the more it becomes clear: It’s much worse than we were led to believe by state government officials,” he said in a video posted to X. Oz said that the “corrective action plan” provided to the federal government by the state of Minnesota on New Year’s Eve was “deeply insufficient.”</p>
<p>“We will begin auditing Medicaid receipts and defer paying on claims based on fraud, waste, and abuse,” he said, noting that the programs listed as vulnerable came from the Minnesota state government.</p>
<blockquote class="twitter-tweet" data-media-max-width="560">
<p dir="ltr" lang="en">🚨Minnesota Medicaid Fraud Update: <a href="https://t.co/Dk0W07P1U8">pic.twitter.com/Dk0W07P1U8</a></p>
<p>— DrOzCMS (@DrOzCMS) <a href="https://twitter.com/DrOzCMS/status/2008737548009717925?ref_src=twsrc%5Etfw">January 7, 2026</a></p></blockquote>
<p>The Daily Wire reached out to Minnesota Governor Tim Walz’s office for comment on the remarks from Oz.</p>
<p>The announcement comes after Health and Human Services said last week that federal child care payments would be paused as well. Governor Walz opted not to seek re-election amid the intense scrutiny from fraud allegations within the Medicaid system and other federally funded, state-administered social services programs.</p>
<p>On Tuesday, an <a href="https://www.auditor.leg.state.mn.us/meeting/mm/mm_Auditor_LAC-20260106-DHSBHAG-Pres.pdf" target="_blank" rel="noopener">audit</a> from the Office of the Legislative Auditor underscored concerns in the state with a critical look at Behavioral Health Administration Grants through the state’s Department of Human Services.</p>
<p>The report said that the Behavioral Health Administration “did not comply with most requirements [the audit] tested.” The report recommended that BHA “Establish sufficient internal controls to ensure compliance with grant requirements” and “conduct grant monitoring activities as required by state policies.”</p>
<p>Specifically, the report said that the BHA “paid almost $296,000 to 11 out of 18 grantees for: Unsupported costs [and] Reimbursement requests with errors.” It also said that BHA “overpaid” over $41,000 to two entities with grants, and gave “$915,540 to 6 grantees for work performed before BHA executed grant agreements.” In addition, over a dozen “existing grantees” received $2.5 million despite “bypassing [the] competitive grant award process.”</p>
<p>In response to the audit’s findings, Shireen Gandhi, the temporary commissioner for Minnesota&#8217;s Department of Human Services, said the findings are a “road map” for improvement at a legislative hearing on Tuesday.</p>
<p>“With respect to the audit report, while it’s upsetting that DHS has findings in areas we have placed concerted effort, the OLA’s report highlights the importance of the grant compliance work already underway at the department. And the findings provide us with a road map for our focus going forward to continue strengthening oversight and integrity of behavioral health grants,” Gandhi said. “I take the report seriously, I accept responsibility for the findings, and I will ensure DHS closes the findings.”</p>
<p>In Washington, the House Oversight Committee held a hearing regarding the fraud concerns.</p>
<p>&#8220;The breadth and depth of this fraud is breathtaking, and I fear that this is just the tip of the iceberg,” Chairman James Comer (R-KY) said during the hearing.</p>
<p>Walz, the 2024 Democratic vice presidential nominee, took aim at the Trump administration while explaining his decision not to pursue a third term as governor.</p>
<p>“I won’t mince words here. Donald Trump and his allies – in Washington, in St. Paul, and online – want to make our state a colder, meaner place,” the Democrat stated.</p>
<p>“They want to poison our people against each other by attacking our neighbors. And, ultimately, they want to take away much of what makes Minnesota the best place in America to raise a family. They’ve already begun by taking our tax dollars that were meant to help families afford child care. And they have no intention of stopping there,” the governor added.</p>

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Dr. Oz Blasts Minnesota’s ‘Deeply Insufficient’ Plan As Feds Audit Medicaid Payments