Vice President JD Vance says federal investigators will find criminal wrongdoing behind what the administration describes as a billion-dollar Medicaid fraud epidemic, and he wants the officials who looked the other way to face prison time.
In an exclusive interview on Fox News' "Saturday in America" with Kayleigh McEnany, Vance laid out the sharpest warning yet from the White House anti-fraud task force he chairs. The target: state governments, starting with California, that the administration accuses of tolerating, or worse, enabling, massive theft from taxpayer-funded health programs.
Vance told Fox News the scope of the suspected fraud is so large that someone in government had to have known what was happening. And he made clear the task force intends to find out who.
"I guarantee there's going to be some criminal wrongdoing that we're going to find, because there's so much wrongdoing, somebody had to know what they were doing."
That guarantee came alongside concrete action. On Wednesday, the administration announced it would defer $1.3 billion in federal Medicaid funding to California, citing oversight concerns. Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz appeared alongside Vance for the announcement.
The funding deferral is not an abstract budget maneuver. It is tied directly to what the administration describes as California's failure to police suspected fraud among hundreds of hospice providers. The New York Post reported that the $1.3 billion in deferred reimbursements is connected to 800 California hospices suspected of fraudulent activity.
Dr. Oz offered a striking detail about the scale of the problem in the Los Angeles area alone.
"We believe that at least half of the hospices in the entire area around Los Angeles are fraudulent."
Half. If that estimate holds up, Los Angeles has been home to one of the largest concentrations of health-care fraud in the country, operating in plain sight, billing taxpayers for services that were never delivered or were never needed, while state regulators apparently did little to stop it.
The task force has already suspended hundreds of Los Angeles hospices tied to more than $600 million in suspected fraud. And the actions are not limited to hospice care. The task force announced a six-month freeze on new Medicare enrollments for hospice and home care providers nationwide, and Vance said 22 subpoenas have been issued in connection with an alleged fraud ring in Minneapolis.
The California deferral may be the headline, but the administration's reach extends far beyond one state. Vance said the task force is sending letters to all 50 state Medicaid programs requiring them to demonstrate they are effectively and aggressively prosecuting fraud.
"These letters are the first step. The first effort to try to force these states to get serious about prosecuting fraud."
The threat behind the letters is real. Just The News reported that states failing to crack down could lose federal funding, beginning with money for their own anti-fraud units and potentially expanding further. Vance framed the ultimatum in blunt terms.
"If they do not aggressively prosecute Medicaid fraud, we are going to turn off the money that goes to these anti-fraud units."
That is a pointed irony worth pausing over. States receive federal dollars specifically to investigate Medicaid fraud. If those units are not doing the job, the administration says it will cut the funding that supports them. The message: taxpayers should not be paying for watchdogs that refuse to bark.
Newsmax reported that Thomas Bell, inspector general at the Department of Health and Human Services, sent a letter to state attorneys general reinforcing the stakes. "This means your failure to do your job has put all of your state's Medicaid funds in jeopardy," Bell wrote.
The administration is reviewing state Medicaid Fraud Control Units, federally funded agencies tasked with investigating fraud and abuse. Possible consequences for noncompliance range from corrective action plans to reduced federal support and, in severe cases, the withholding of federal Medicaid funding altogether.
The vice president did not limit his comments to faceless bureaucracies. He directed a specific line of inquiry at California Gov. Gavin Newsom, referencing what he described as a report alerting the governor to widespread fraud, a report that, Vance suggested, produced no meaningful response.
"When I hear about a report that says to the governor, 'Here's all this fraud,' and he doesn't do anything about it, I ask myself, 'Was anybody engaged in criminal wrongdoing? Was anybody in his office engaged in criminal wrongdoing?'"
Vance did not specify which report he was referencing. But the implication was unmistakable: the task force intends to examine whether government officials in California had knowledge of the fraud and failed to act, or did something worse.
He followed up with a promise and a consequence.
"I am going to promise the American people we're going to look into that stuff, we're going to investigate it, and we're going to take it seriously. Because if there was criminal wrongdoing, then people ought to go to prison for it."
This is not the first time Vance has made headlines with aggressive investigative moves. He previously announced charges related to alleged fraud in other high-profile cases, and the task force has already withheld $1.4 billion from home health and hospice providers suspected of bilking taxpayers.
Gov. Newsom's office did not take the accusations quietly. A spokesperson told Fox News Digital that California was ahead of the federal government on this issue, pointing to a 2022 moratorium on all new hospice provider licenses that Newsom implemented.
"Tackling fraud is nothing new to California, which is why Governor Newsom implemented a moratorium on all new hospice provider licenses back in 2022, to root out fraud while preventing bad actors from entering the system. We're glad to see the Trump administration follow California's lead on this after weeks of us calling for them to do the same."
The spokesperson then pivoted to offense, accusing the Trump administration of its own ethical lapses: "If the Trump administration wants to focus on internal criminal wrongdoing, they don't need to look very far, pardoning criminal cronies and letting bad actors skate has been a flagship of the president's administration, so long as these individuals donate or vote for him."
Newsom himself posted on X, writing: "The Trump Administration, home to the biggest fraudsters on Earth, is trying to blame California for issues with THEIR federal programs. Glad to see the Feds finally taking seriously the fraud in the programs they themselves manage...only 15 months after Trump took office."
The governor's defense raises an obvious question. If California imposed a moratorium on new hospice licenses in 2022, and if the administration's estimate that half the hospices in the Los Angeles area are fraudulent is even close to accurate, what exactly did that moratorium accomplish? A moratorium that stops new licenses does nothing about hundreds of existing providers allegedly running fraudulent operations. Vance's task force appears to be asking the same thing.
The anti-fraud task force's findings, as described by the administration, include billions in fraudulent contracts and benefits paid to deceased individuals. The task force has shut down what Vance called "fraudulent hospice centers" and is now pressing states to account for their own enforcement records.
The political dynamics are worth noting. The states drawing the most attention, California and Minnesota, are governed by Democrats. The administration's framing positions blue-state leadership as either complicit in or negligent about fraud that costs federal taxpayers billions. Newsom's office insists California has been proactive. The administration says the results tell a different story.
Vance has been busy in his role as the administration's point man on fraud. On May 13, he spoke at a news conference on anti-fraud initiatives in the Indian Treaty Room of the Eisenhower Executive Office Building in Washington, D.C. The next day, he delivered remarks at Bangor International Airport in Maine, promoting the same agenda.
The vice president's public schedule, recent high-profile appearances notwithstanding, has increasingly centered on this anti-fraud campaign, a sign that the White House sees it as both good policy and good politics heading deeper into the administration's term.
Several questions remain open. Vance referenced a specific report that he said alerted Newsom to the fraud problem, but he did not identify it publicly. The exact criminal wrongdoing investigators are examining has not been detailed. Which specific hospice centers were shut down, and which states beyond California and Minnesota are under the closest scrutiny, remain unclear.
The letters going out to all 50 states will set a clock. Each state will have to show it is doing the work, or face consequences. For states that have been lax, the reckoning may be financial. For officials who may have known about fraud and chose to ignore it, Vance is suggesting the reckoning could be personal.
Taxpayers fund Medicaid to help the sick and the vulnerable. When billions vanish into fraudulent hospices and phantom benefits, the people who get hurt are the ones the program was built to serve. If government officials stood by and let it happen, accountability should not stop at a sternly worded letter.
