Minnesota federal Medicaid funding dispute

A dispute has emerged between Minnesota state officials and the Trump administration regarding federal Medicaid funding. In October 2026, the federal government froze $550 million in Medicaid funds following allegations of widespread healthcare fraud in the state that surfaced in late 2025.

Minnesota Department of Human Services Director John Connolly contested the freeze in a letter to CMS Administrator Dr. Mehmet Oz, stating the state has met reporting requirements by identifying 14 high-risk providers. Connolly argued the federal government lacks sufficient evidence to justify the scale of the freeze, describing the move as ‘a war on Medicaid, not a war on fraud’ and a ‘retribution campaign’ against the state.

Adding to the controversy, former acting U.S. Attorney Joe Thompson alleged that over $9 billion in Medicaid fraud occurred during Governor Tim Walz’s administration. Thompson’s claims include references to the ‘Feeding Our Future’ scandal involving $250 million in COVID-era meal program funds and concerns regarding $100 million in potential fraud within state autism therapy programs.