The Centers for Medicare & Medicaid Services (CMS) is demanding Minnesota Gov. Tim Walz take a more “aggressive approach” in confronting fraud or risk losing federal Medicaid funding.
“Recent findings from multiple investigations — combined with ongoing vulnerabilities across several service areas — indicate systemic issues requiring immediate action,” CMS Administrator Dr. Mehmet Oz wrote in a Friday letter to the governor.
Walz’s handling of widespread fraud in his state has been the subject of national scrutiny over the last two weeks following a City Journal report alleging some of the stolen money made its way to Somali terror group al-Shabaab.
Assistant U.S. Attorney Joe Thompson has said that Minnesota’s “massive fraud schemes form a web that has stolen billions of dollars in taxpayer money.”
These schemes include the $250 million free food scandal, which saw a nonprofit known as Feeding Our Future and its partner sites defraud a program intended to help feed needy children.
More recently, federal prosecutors have charged several individuals with defrauding Medicaid-funded housing and autism therapy programs. More than 80 people have been charged across the three schemes, the vast majority of whom are Somali.
One program known as Housing Stabilization Services was completely shut down by the state in August due to widespread fraud.
“Fourteen additional services in Minnesota show high-risk indicators that warrant oversight — a finding you have acknowledged. While we appreciate your announcement of an audit and payment suspensions, the CMS believes a far more aggressive approach is required to protect taxpayers — and Medicaid enrollees,” Oz said in his letter.
As such, Oz is asking Minnesota to provide weekly updates on its audit activities related to the 14 high-risk services, freeze enrollment of all high-risk providers, confirm all providers in place are legitimate or remove them, and submit a corrective action plan on how it will prevent future fraud.
“By the end of January 2026, if your administration has not taken sufficient corrective steps, CMS may initiate actions to withhold federal Medicaid funding for expenditures related to the fourteen identified high-risk programs until we are confident fraud, waste, and abuse have been addressed,” Oz wrote.
‘They went gangbusters’
In a video accompanying his letter, Oz elaborated on the issue and explained why he believes fraud has ballooned in Minnesota.
“How did this happen? Well Medicaid programs are run by the states, which in Minnesota means the Tim Walz administration. Gov. Walz and the state’s other Democrats rely on Somali votes to get elected. So they decided to look the other way because they were afraid of ‘political backlash,’” Oz said.
You’ve probably heard the news by now: Minnesota fraudsters stole over $1 billion from Medicaid. And you deserve an explanation.
Our staff at CMS told me they’ve never seen anything like this in Medicaid — and everyone from Gov. Tim Walz on down needs to be investigated, because… pic.twitter.com/MFUoYYJoEa
— DrOzCMS (@DrOzCMS) December 5, 2025
“When these scammers realized that nobody was guarding the cash register, they went gangbusters,” he continued. “Our message to Walz is clear: either fix this in 60 days or start looking under your couch for spare change, because we are done footing the bill for your incompetence.”
Oz said his staff told him that “they’ve never seen anything like this in Medicaid — and everyone from Gov. Tim Walz on down needs to be investigated, because they’ve been asleep at the wheel.”
Walz announced in late October that he had ordered a third-party audit of billing for the 14 high-risk Medicaid services. His office said at the time that payments for these programs would be paused for up to 90 days in order to detect suspicious billing activity.
“We cannot effectively deliver programs and services if they don’t have the backing of the public’s trust. In order to restore that trust we are pumping the brakes on 14 programs that were created to help the most disadvantaged among us, yet have become the target of criminal activity,” Walz said.
Walz’s handling of the fraud scandal is now being investigated by the U.S. House Oversight Committee, while the U.S. Treasury Department is investigating allegations that some of the stolen money was received by al-Shabaab.
Anthony Gockowski
Anthony Gockowski is Editor-in-Chief of Alpha News. He previously worked as an editor for The Minnesota Sun and Campus Reform, and wrote for the Daily Caller.
