CMS’ New Approach to Federal Medicaid Spending in Cases of Potential Fraud

(Authors: Jessica Mathers, Alice Burns, and Robin Rudowitz for The Kaiser Family Foundation Published: Mar 16, 2026)

The current administration is placing a new emphasis on potential fraud in Medicaid. The Centers for Medicare and Medicaid Services (CMS’) current efforts are focused on Minnesota and three other states with Democratic governors (California, Maine, and New York). The House Committee on Energy and Commerce has also sent requests for information about potential Medicaid fraud to 11 states (the 4 CMS is focused on and 7 others, including 2 with Republican governors). CMS has historically partnered with states to identify and resolve issues of fraud, waste, and abuse, and denied the federal share of Medicaid spending when fraud has been identified by an audit, investigation, or reported by the state. However, CMS has recently announced a new approach to fraud that will rely more heavily on options to pause or withhold significant amounts of federal funding in cases of potential fraud, which could have broad implications for states and enrollees. This issue brief explains the new approach. Key findings include: Continue reading here…

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