Dr. Oz urges Walz to act on reported Somali Medicaid fraud to avoid loss of federal funding: ‘We’ll cease payments’

Dr. Mehmet Oz, head of the Centers for Medicare & Medicaid Services (CMS), issued a stern warning to Minnesota Governor Tim Walz on Friday, stating that federal Medicaid funding could be withdrawn unless the state restores the programs integrity.

On the social media platform X, Oz claimed that over $1 billion had been misappropriated through an extensive Medicaid fraud operation allegedly involving members of Minnesotas Somali community. He suggested that some of the misused funds may have been funneled to the Somali terrorist group Al-Shabaab.

"CMS staff have never encountered a scheme of this magnitude in Medicaid, and oversight from the governors office downward has been lacking," Oz said.

Required Actions from Minnesota

Dr. Oz outlined a 60-day timeline for corrective measures, including:

• Submitting weekly updates to CMS regarding anti-fraud efforts
• Suspending enrollment of high-risk providers for six months
• Verifying all current providers or removing illegitimate ones
• Providing CMS with a comprehensive plan to prevent future fraud

He warned, "If the state fails to meet these requirements or cooperate fully, federal funding for these programs will be halted."

Spike in Medicaid Program Costs

Oz highlighted significant increases in recent Minnesota Medicaid initiatives. The "Housing Stabilization Services" program, initially budgeted at $2.6 million annually, disbursed more than $100 million in 2024. Similarly, the "Early Intensive Developmental and Behavioral Intervention" program grew from $3 million in 2018 to nearly $400 million in 2023.

Allegations and Consequences

According to Oz, the alleged fraud involved misuse of taxpayer funds to purchase luxury items, overseas property, and kickbacks linked to sham autism treatment centers. He criticized Walz for not intervening, attributing inaction to political considerations.

Minnesota officials had previously notified CMS of issues but failed to implement effective solutions. CMS took action by shutting down the most problematic housing program and freezing provider enrollment in highly abused programs.

"The message is straightforward: either resolve these issues within 60 days or federal support will cease," Oz emphasized.

Context

The warning coincides with recent federal scrutiny of Minnesota by the Trump administration, including Treasury Department investigations into alleged diversion of taxpayer funds to Al-Shabaab. These investigations follow broader efforts to combat fraud and financial misconduct in the state.

Author: Lucas Grant