The Trump administration announced Tuesday that it is freezing more than $1 billion in Medicaid payments to California and Minnesota in an effort to crack down on fraud.

Medicaid is the public health insurance for people with low incomes, including some disabled and elderly people, jointly funded by state and federal dollars.

The U.S. Department of Health and Human Services and the Centers for Medicare & Medicaid Services deferred more than $867 million to California and $199 million to Minnesota. The feds say they need more documentation from those states to support some Medicaid claims for services that are at high risk for fraud.

The freeze marks the latest round of withheld payments as the Trump administration continues its crackdown on suspected fraud in publicly-funded social service programs, mostly focusing on Democratic-led states. Earlier this year, the Trump administration launched a fraud task force to look into potential waste or abuse in publicly-funded benefits programs, explicitly naming states such as California, Colorado, Illinois, Maine, Minnesota and New York.

The Trump administration has already deferred Medicaid payments in Minnesota twice this year, totaling nearly $400 million. The deferral process, under which the federal government can withhold funding when questioning claims already billed to Medicaid, had never been used to deny funding for entire service areas until a $243 million deferral in February, the Minnesota Attorney General noted.

A letter delivered Tuesday from CMS to the Minnesota Department of Human Services stated that $195 million of the deferred $199 million comes from specific providers that CMS identified as high-risk for fraud or “aberrant billing practices” based on historical billing and analysis. The money comes from services delivered from January through March and has already been paid. States will have to provide documentation backing up the claims or be forced to reduce future billing to the federal government.

The Trump administration has also threatened to withhold $2 billion in annual Medicaid funding to Minnesota in a separate process. The funding fight in Minnesota centers on 14 Medicaid services deemed high-risk to fraud and are largely designed to give long-term care for elderly and disabled people. But state officials have said that funding freezes could deliver a serious blow to the state’s Medicaid program more generally, which cost $18 billion in 2024 and covers other low-income Minnesotans.

John Connolly, temporary commissioner and state Medicaid director for the Minnesota Department of Human Services, said in a statement that Tuesday’s deferral reflects the federal government’s “unprecedented and punitive ways as part of their war on Medicaid and its recipients.”

“CMS touts their new fraud-detection capabilities, yet has not provided data or explanation on how the deferral amount was calculated or what it was based on. I respectfully ask the federal government to partner with us and share any information about their methods to identify potentially fraudulent providers in Minnesota,” Connolly said.

The federal-state fight over Medicaid funding has affected thousands of Medicaid providers in Minnesota, who were abruptly cut off from funding as the state raced to reach a federal deadline to screen all providers in the “high-risk” services. Providers and their advocates said the process was rushed and left legitimate providers unable to get paid for delivering services to vulnerable Minnesotans.

HHS Secretary Robert F. Kennedy Jr. said the Trump administration’s goal is to strengthen the integrity of the Medicaid program and make sure federal funds are spent appropriately.

“States that receive federal Medicaid funding must demonstrate that every dollar meets federal requirements,” Kennedy said in a news release on the deferred funds. “When they cannot, we will not release federal funds until they do.”

California Gov. Gavin Newsom, a Democrat, called the withheld funds a “recycled political stunt” in a post on X, and said his state was being targeted for political reasons.

Minnesota Democratic Gov. Tim Walz rejected the Trump administration’s framing of the situation in a post on X: “This isn’t about fraud — it’s about cutting your healthcare so that Trump can afford the tax cuts he gave to billionaires.”

CMS said it identified unusually high growth in spending on certain in-home care programs in California, triggering the hold on that state’s funds. It has not provided proof of fraud.

Newsom countered in his X post, arguing that California is saving taxpayer money “by keeping seniors and people with disabilities out of far more expensive nursing homes.”

In Minnesota, a CMS review flagged expenditures that raised “potential eligibility or billing concerns.”

“CMS is done trying to chase down stolen and misused funds after they’ve already left the building,” Dr. Mehmet Oz, CMS administrator, said in a news release, adding that the deferred payments are part of a “proactive new approach to program integrity.”

The pauses in funding don’t affect who is eligible for Medicaid, and they’re not permanent cuts.

Alyssa Chen of the Minnesota Reformer contributed to this story. Stateline reporter Anna Claire Vollers can be reached at avollers@stateline.org.

Federal officials have cut off more than $2.4 million in federal funds for 2026-27  and 2027-28 targeting teen pregnancy prevention that would have gone to the Wisconsin health department, according to federal records.

The funds would have gone to a variety of nonprofits and agencies in counties  with the highest rates of pregnancy and sexually transmitted infections, federal grant information reviewed Monday showed.

The single largest grant had been allotted to Embolden WI, a nonprofit supporter of health equity and advocacy projects, to help fund a program to improve communication between healthcare providers and Wisconsin teenagers.

Providers and Teens Communicating for Health — PATCH for short — employs teenagers who “have conversations with healthcare professionals about what teens want and need when they show up in the healthcare system and how we can better serve them to make sure that they get the care they need and deserve,” said Amy Olejniczak, the founder and executive director of PATCH.

PATCH has been operating since 2010, hiring, training and paying the teen participants who conduct workshops and serve as consultants for healthcare providers, including providers who are working to prevent teen pregnancy.

“Our role as PATCH is take what we know about working directly with youth and to help other organizations doing more direct teen pregnancy prevention work around the state improve their youth engagement, and make sure that they are engaging youth in ways that are effective and improving the quality of work that they’re doing,” Olejniczak told the Wisconsin Examiner on Monday. “A lot of what we do is work to improve communication between teens and the adults that serve them.”

 About 300 Wisconsin teens have participated in PATCH since it launched, Olejniczak said. Currently 75 teens ages 14 to 18 take part all around the state.

In addition to putting on workshops for healthcare providers, they also hold peer workshops for other teens, “talking to other youth about how to start to manage their own healthcare experiences,” Olejniczak said.

The federal government cut the funds immediately on Friday, June 26. PATCH lost $130,000 for the July 1, 2026-June 30, 2027 fiscal year and another $130,000 for the July 1, 2027-June 30, 2028 fiscal year. 

An annual grant to the Wisconsin Department of Health Services was among 53 grants out of 67 grants under the Teen Pregnancy Prevention Program that were canceled Friday by the U.S. Department of Health and Human Services.

Stateline reported the canceled grants totaled about $68 million and affected grant recipients in more than two dozen states. The canceled grants included funds awarded to universities, community organizations, state health departments and Planned Parenthood affiliates in some states.

The grants were canceled two years before their expiration dates because, recipients were informed, the programs did not align with agency priorities, one of the grantees who received a termination notice told Stateline — specifically that the program “normalizes or promotes sexual activity for minors.”

Teen birth rates have fallen dramatically over the past two decades, Stateline reported. Experts attribute the drop to fewer teens deciding to have sex earlier, sex education and better access to contraception, especially for girls.

The Teen Pregnancy Prevention Program was launched in 2010 in the HHS Office of Population Affairs.

On Monday, Embolden WI credited the federal program with helping to reduce teen birth rates nationally by 72% since 2007. The organization called that “a historic public health achievement that experts attribute to evidence-based programming, improved access to health information, and the kind of sustained investment in adolescent health that TPP was designed to support.”

Federal records that were still accessible Monday showed that the Wisconsin Department of Health Services was approved for $1,215,905 per year on a five-year cycle through June 2028. The funds were in turn distributed as subgrants around Wisconsin, including to Embolden WI for PATCH.

DHS did not respond Monday to a request for information about subgrant recipients affected by the federal action. A list that the department distributed includes public health departments in Bayfield, Clark and Oneida counties, the Verona Area School District and more than a half-dozen other nonprofits, with grants ranging from $10,000 to $125,000.

Olejniczak said the PATCH program has helped guide health providers and public health organizations to communicate with teens more effectively.

“We actually love working with med students and nursing and PA [physician assistant] students because they’re just getting started in their training. And we want to make sure that they’re thinking about their patients from their perspective,” she said.

The program works with a variety of local health clinics. For the teens who take part, the experience also serves as a job-readiness program, she said, leading some to enter healthcare professions such as nursing.

The grant covered about 25% of the PATCH annual budget. Olejniczak said PATCH and Embolden WI are seeking other sources of funding to replace what’s been cut so that the program can keep going.

The impact of the cuts goes well beyond just the effect on the PATCH program, she said.

“We know that teen pregnancy prevention has been effective — a lot of the work that has been done over the past decade has improved outcomes. So it’s really just devastating for public health overall,” Olejniczak said. “Our youth just got the message from their federal government that their health, well-being and transition to adulthood is not important.”

WASHINGTON — The U.S. Department of Education announced sweeping efforts Tuesday to outsource its special education programs and civil rights enforcement to other agencies, in another major step by President Donald Trump’s administration to dismantle the department.

The Department of Health and Human Services will administer programs under the Education Department’s Office of Special Education and Rehabilitative Services, or OSERS, while civil rights enforcement under Education’s Office for Civil Rights, or OCR, will be transferred to the Department of Justice. 

The move follows 10 earlier interagency agreements, or IAAs, with the departments of Labor, Health and Human Services, Interior, State and Treasury that transfer several of Education’s responsibilities to those agencies.

The Education Department clarified in fact sheets that in the agreements announced Tuesday, it “will continue to perform all statutorily required duties and responsibilities.”

“The Trump Administration has been clear: as we scale back federal micromanagement when it hinders success, we are equally committed to bolstering the efficacy of federal oversight where it is essential,” U.S. Education Secretary Linda McMahon said in a statement Tuesday.

The administration has sought to do away with the 46-year-old department as part of Trump’s quest to return education “back to the states.” That push continues despite much of the oversight and funding of schools already occurring at the state and local levels. 

Congress created the Department of Education, and only Congress has the authority to abolish the agency. 

Special education

On a background call with reporters, a senior department official said OSERS “will maintain its independent statutory functions without interruption to vigorously enforce compliance with all of OSERS programs.” 

OSERS is responsible for administering the Individuals with Disabilities Education Act, or IDEA, which guarantees a free public education for students with disabilities. The umbrella unit OSERS includes the Office of the Assistant Secretary, Office of Special Education Programs and the Rehabilitation Services Administration. 

The official added that “students will not lose any rights, including their right to a free appropriate public education,” adding that “no agreement can alter the rights that students with disabilities are afforded under federal law.” 

“In coordination with and at the direction of OSERS, HHS will support meaningful stakeholder outreach; grant administration; enforcement, compliance, and monitoring activities; annual performance determinations and assessments; collection, reporting, and analyzing of data for monitoring compliance; and drawdowns of Federal funds,” according to a fact sheet. 

Civil rights oversight

Meanwhile, Education’s agreement with the DOJ is intended to “support and bolster the federal government’s enforcement of federal civil rights laws,” a senior department official said. 

The Education Department’s Office for Civil Rights, or OCR, is tasked with investigating civil rights complaints from students and families. 

Under the agreement, “OCR will utilize the Civil Rights Division to evaluate, investigate and resolve complaints filed under the laws enforced by OCR,” the official said. 

The official also stressed that under the interagency agreement, OCR “retains management and leadership of OCR in accordance with federal law.” 

Education will also partner with the DOJ on student privacy protection, in which the Justice Department will “review complaints alleging privacy act violations, conduct necessary investigations and recommend potential resolutions,” per a fact sheet.

In another agreement, the DOJ will “provide technical assistance” in training and advisory services regarding the desegregation of public schools, according to a fact sheet.  

‘This isn’t efficiency — it’s chaos’

The announcement sparked fierce condemnation from Democratic members of Congress, labor unions and advocacy groups Tuesday. 

Rachel Gittleman, president of American Federation of Government Employees Local 252, the union representing Education Department workers, said the interagency agreements regarding special ed programs and civil rights enforcement “will leave our most vulnerable students and families who have been shut out of our education system without the services they need and without protection when they face discrimination,” in a Tuesday statement. 

“This isn’t efficiency — it’s chaos,” Gittleman added. “Secretary McMahon is yet again targeting historically underserved students, eroding public trust, and sowing dysfunction for the federal employees who are trying to do their jobs on behalf of the public.” 

U.S. Sen. Patty Murray of Washington state, the top Democrat on the Senate Appropriations Committee, said that “instead of helping kids get a great education, this administration is spending its time, energy, and taxpayer resources fixated on where employees sit and illegally trying to shutter the Department of Education,” in a Tuesday statement.

“It’s an outrageous betrayal that undoes decades of hard-won progress for students,” Murray added. “More kids with disabilities will be denied the education they are entitled to by law, and more college students who were harassed or assaulted will go without the justice they are owed.”

Randi Weingarten, president of the American Federation of Teachers, one of the largest teachers unions in the country, said the decision “will have dire, real-world consequences.” 

“Congress — the only body that can legally take such actions — has refused to follow the whims of the White House when it comes to abolishing the Education Department,” Weingarten said. “And parents, educators, students, and the disability and civil rights communities are rising up — and will fight in every way possible to reverse this in the courts, at the ballot box and in the court of public opinion.”