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Vance Drops $1.3 Billion Hammer on California; Nationwide Hospice Freeze Takes Effect

Vice President JD Vance’s anti-fraud task force escalated its healthcare crackdown Wednesday with a double-barreled announcement: a six-month nationwide freeze on new Medicare hospice and home health enrollments, and a $1.3 billion deferral of Medicaid funding to California — the administration’s largest single healthcare funding action to date.

CMS Administrator Dr. Mehmet Oz, who has spent months documenting alleged hospice fraud concentrated in the Los Angeles area, announced that the agency has already suspended 800 hospices that billed Medicare $1.4 billion last year. He believes at least half of the hospices in LA alone are fraudulent. Washington Times

The six-month enrollment moratorium went into effect immediately Wednesday, preventing any new hospice or home health providers from signing up to receive Medicare reimbursements while the agency conducts enhanced screening. Oz called it “shutting the door on fraud — preventing new bad actors from entering Medicare while we aggressively identify, investigate, and remove those already exploiting them.” The National Desk

“We’re announcing that the federal government is deferring $1.3 billion in Medicaid reimbursements from the state of California — and the simple reason is because the state of California has not taken fraud very seriously,” Vance said at a White House press conference. “If you allow billions more dollars to go out the door, not to healthcare services for low-income families, but to fraudsters, you are eventually going to destroy the Medicaid program.” NOTUS

Additional measures announced Wednesday include launching a publicly available hospice scoring system to flag providers with troubling billing patterns, expanding pre- and post-claim review programs in Florida, Illinois, Oklahoma, Ohio, North Carolina, and Texas, and implementing fingerprinting-based background checks for high-risk home health agencies. This is the third major enrollment moratorium CMS has imposed — earlier freezes covered durable medical equipment suppliers and certain Minnesota providers. The Daily Beast

Healthcare industry groups pushed back. The National Alliance for Care at Home warned the blanket moratorium raises “serious access-to-care concerns in areas where patient demand is growing or existing capacity is already strained, leading to longer wait times, reduced service availability, and fewer choices for patients — particularly in rural or underserved communities.” STAT News also noted the administration recently admitted it had dramatically overinflated the number of New Yorkers receiving fraudulent home care — a sign that some early fraud estimates may need recalibration. Democracy Docket

The California action is the latest escalation in what has become a running confrontation between the Trump administration and Democratic-led states over Medicaid oversight. The administration has previously frozen Medicaid funds to Minnesota over the Feeding Our Future scandal — the $250 million COVID-era food fraud case — and has threatened action against Maine and other states. Vance said the goal is not to punish states but to save the Medicaid program from what he called “dysfunctional state bureaucrats” who allow fraud to consume funds intended for low-income families. Washington Times

Sources: CNN Politics | The Hill | STAT News | NewsNation | Townhall / CMS