Pallone Report Exposes How Trump’s CMS Is Weaponizing Medicaid Against Blue States

Energy and Commerce Committee Ranking Member Frank Pallone, Jr. (D-NJ) released a Democratic staff report today documenting how the Trump Administration has turned Medicaid anti-fraud tools into a weapon against states that opposed the president in the 2024 election. The Administration has held up billions of dollars in funding for home care, behavioral health care, and other services that seniors, children, and people with disabilities rely on.

“Nobody is against fighting fraud. The federal government has worked effectively with states to combat waste, fraud, and abuse for decades,” Pallone said. “But the Trump Administration isn’t fighting fraud. They’re holding health care hostage in states that didn’t vote for Donald Trump, and seniors, children, and people with disabilities are paying the price amid this cruel and cynical weaponization of federal resources.”

The report, titled “Holding Health Care Hostage: How Trump’s CMS Is Weaponizing Health Care Against Americans in Blue States,” finds:

• Minnesota: After President Trump threatened the state with a “DAY OF RECKONING & RETRIBUTION,” the Centers for Medicare & Medicaid Services (CMS) moved to withhold up to $2 billion in Medicaid funding. It has deferred nearly $550 million, including after approving the state’s own corrective action plan, and still hasn’t released the funds.
• New York: CMS falsely claimed three in four New York Medicaid enrollees received personal care services – overstating the real number by roughly 1,000 percent. CMS later retracted it. A link in CMS’s letter carried a tag showing staff used ChatGPT to find a summary of CMS’s own data.
• California: CMS has deferred $3.4 billion this year in funding that treats the state’s home health care services, claiming, without any proof, that California’s successful growth in these services constituted fraud. For years, CMS itself has encouraged the expansion of these services, including during the first Trump Administration.
• Politicized watchdog: The Department of Health and Human Services’ (HHS) Inspector General decertified the Medicaid fraud units in Hawaii and New York, cutting off federal funding to the people who actually prosecute Medicaid fraud.
• Partisan task force: Trump’s executive order creating Vice President Vance’s anti-fraud task force singles out six states, all won by Kamala Harris and led by Democratic governors.

“Though the Administration portrays these attacks as a neutral, nationwide program integrity effort, its rhetoric and fixation on states that did not vote for Donald Trump and are led by Democrats reveal a campaign to weaponize federal resources against the President’s adversaries and cloak it in language of good governance,” the report states.

The report calls for reforms requiring the Trump Administration to:

• Collaborate with states before taking funding actions,
• Back cuts with specific evidence,
• Set clear criteria for recertifying state fraud units, and
• Report funding actions to Congress.

The report is available HERE.

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