Medicaid Fraud Crackdown Intensifies, But Is It Solving the Right Problem?

In January 2026, Minnesota received a letter from CMS announcing it would begin withholding $515 million in quarterly federal Medicaid payments, citing unresolved program integrity concerns.¹ The state sued. A federal court dismissed the case on procedural grounds in April, and even after CMS accepted Minnesota's corrective action plan the following month, the withheld funds were not released.² By May, CMS had gone further still, deferring $1.3 billion in federal Medicaid funding to the state—the largest deferral action in the agency's history.³