A federal court rejected Minnesota’s attempt to restart Medicaid funding that the Trump administration had halted over concerns people are stealing the money, with the judge saying even the state has acknowledged it has a “serious fraud problem.”
Judge Eric Tostrud, a Trump appointee, said Minnesota may still prevail later in the case, but for now the feds are on relatively solid legal footing in deferring more than $250 million in Medicaid money to prod the state to combat fraud.
“Though Minnesota credibly complains that the federal government’s deferral is historically unprecedented in its size and timing, I conclude on this record that the deferral likely complies with the controlling federal regulations,” the judge wrote.
The ruling is a striking win for President Trump, who had ordered his administration to take steps to punish Minnesota over a series of public benefit scandals, particularly involving the Minneapolis area’s large Somali community.
Vice President J.D. Vance and Centers for Medicare and Medicaid Services Administrator Mehmet Oz personally announced the Medicaid money freeze in February.
State Attorney General Keith Ellison then sued to try to keep the money flowing, saying legitimate beneficiaries may be harmed as the state tries to deal with its fraud problem.
Judge Tostrud, though, said the state “shares the blame” for that by allowing fraud, and now pushing strict measures to try to combat it.
Mr. Ellison had argued that federal officials had singled out Minnesota for punishment. He pointed to the vehement denunciations Mr. Vance and Dr. Oz had aimed at the state and its leaders.
But Judge Tostrud said the law does allow deferrals of payment and, for now, the feds appear to be doing it for valid reasons.
Minnesota has come up with a corrective action plan that Dr. Oz’s agency last month approved.
