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The Centers for Medicare & Medicaid Services said it deferred another $1.2 billion in California Medicaid payments directed to personal home care services. Administrator Mehmet Oz tied the move to a widening fraud investigation, while California Sen. Alex Padilla warned the delay could harm people who rely on care. The agency has not publicly detailed the specific claims or providers covered by this latest deferral.
The Centers for Medicare & Medicaid Services has deferred an additional $1.2 billion in California Medicaid payments directed to personal home care services, escalating federal scrutiny of the state’s claims. CMS Administrator Mehmet Oz said the action follows concerns about potential fraud, while the scope of affected providers and the timing of any release have not been specified.
The new deferral follows a July action involving more than $1 billion in Medicaid payments for certain claims in California and Minnesota, including personal care and home-based services. CMS said earlier reviews identified claims requiring additional documentation, expenditures tied to providers flagged in program-integrity reviews, and other billing concerns. The report did not specify whether the latest $1.2 billion overlaps with those earlier claims or represents a separate group of payments.
During an Oval Office briefing, Oz linked the California investigation to potential fraud allegations raised by Nick Shirley, a YouTube content creator who had previously made allegations about Minnesota daycares. Oz said Shirley identified possible concerns in California home health, adult day care and hospice services, prompting further investigation. Those allegations are not, by themselves, a finding that any provider committed fraud.
Oz also cited California personal care services spending growth, saying it had risen by more than 24% over three years—twice the rate of other states’ averages, according to his remarks. He questioned the growth but did not provide a detailed breakdown of the figures during the briefing. Sen. Alex Padilla, a California Democrat, criticized the deferral, saying it would affect older residents, people with disabilities and people recovering from illness or injury.
How the Payment Hold Could Affect Care
The deferral puts a substantial amount of federal Medicaid funding for California services on hold while CMS reviews claims. If payments to providers are delayed, the action could affect organizations that deliver in-home assistance and, in turn, people who depend on that support. The extent of any service disruption is not yet known, and CMS has not identified the providers covered by this latest action.
The move also signals a more direct federal approach to Medicaid program integrity: CMS says it is withholding certain payments while claims receive additional review, rather than trying to recover money after payment. That approach may address concerns about unsupported billing, but it also creates the possibility that payments for eligible care could be delayed while documentation is examined. Padilla’s warning describes a potential impact; the report does not confirm that care has already been interrupted.
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Earlier California and Minnesota Reviews
In July, CMS announced payment deferrals affecting certain Medicaid claims in California and Minnesota. The agency said it had identified spending growth that exceeded national trends in California in-home care programs and claims requiring further documentation. It also reviewed claims across 14 high-risk service areas in Minnesota. The report describes the new California deferral as an additional action, but does not provide the precise relationship between the two rounds.
The latest move is part of a broader federal anti-fraud effort. Oz attributed the crackdown to a task force established in March and led by Vice President JD Vance, alongside collaboration across the administration. In May, CMS also imposed a nationwide freeze on enrollment of Medicare home health and hospice providers, which the agency said was intended to limit entry by bad actors and prevent illegitimate billing. That Medicare enrollment freeze is separate from the Medicaid payment deferral.
California had the highest Medicaid spending of any state in 2024, according to a report by KFF, a health policy research organization. The spending ranking provides scale but does not establish that a particular claim or provider was improper.
“The devastating blow to fraud that is being levered right now into even bigger actions is not done yet.”
— Mehmet Oz, CMS administrator
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Which Claims and Providers Are Affected
CMS has not publicly identified the specific claims, providers or service periods included in the additional $1.2 billion deferral. The report also does not say how long the review is expected to take, what documentation providers must supply, or what criteria CMS will use to release payments. It is unclear whether the full amount is being withheld from the state at once or consists of payments subject to review.
Potential fraud allegations and unusual spending growth are reasons cited for scrutiny, not proof that a particular provider committed fraud. No case findings, provider names or determinations of improper billing were described in the source report. It is also not clear whether California has challenged the decision or what steps state officials may take to address the payment delay.
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CMS Review and State Response
The immediate next step is for CMS to review the affected Medicaid claims and any supporting records. The agency has not announced a deadline or a schedule for releasing payments, and no specific date for further findings was provided. Providers and the state may seek clarification about which claims are covered and what information CMS requires, but the source report does not confirm whether such requests have been made.
Further updates are likely to clarify the amount ultimately held, the duration of the review, and whether CMS identifies unsupported claims or other program-integrity issues. Until the agency releases more detail, the deferral’s effect on California providers and people receiving personal care remains uncertain.
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Key Questions
What payment did CMS defer?
CMS announced that it deferred $1.2 billion in California Medicaid payments directed to personal home care services. The agency has not detailed the individual claims or providers included.
Why did CMS defer the payments?
CMS says the action is part of a review of potential fraud and claims requiring further documentation. Oz also cited growth in California personal care spending. The reported concerns do not establish that specific providers committed fraud.
Is this the first California Medicaid payment deferral?
No. CMS announced an earlier deferral in July affecting certain California and Minnesota Medicaid claims, including personal care and home-based services. The report does not explain whether the latest $1.2 billion overlaps with the earlier action.
Could the deferral affect people receiving home care?
Padilla warned that the decision could hurt older Californians, people with disabilities and people recovering from illness or injury. The report does not confirm that services have been interrupted or identify which recipients may be affected.
When will CMS release the deferred payments?
CMS has not announced a release date or a deadline for its review. The timing depends on details that the agency has not yet made public, including which claims are covered and what documentation is required.
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