Walz unveils anti-fraud package after federal funding threat

Governor Tim Walz announced legislation to strengthen fraud detection and enforcement after federal officials said they would temporarily withhold $259.5 million in Minnesota Medicaid payments; Walz and Attorney General Keith Ellison are scheduled to appear before the U.S. House Oversight Committee next Wednesday.

Governor Tim Walz announced a package of measures intended to strengthen detection, oversight and penalties for fraud in public programs. The announcement followed federal officials saying they would withhold $259.5 million in Medicaid payments and seek a corrective action plan. Walz described the federal move as targeted retribution and said his proposals had been in development before the action. State agencies say they have already implemented reforms and are appealing earlier withholding decisions. Key developments: - Federal officials announced a temporary halt to $259.5 million in Minnesota Medicaid payments and asked the state to implement a comprehensive corrective action plan, giving Minnesota 60 days to respond. - Gov. Walz unveiled legislation aimed at improved fraud detection, oversight and tougher penalties, and said the proposals predated the federal announcement. - Minnesota Department of Human Services officials say the state has added controls since 2024 and is in the process of appealing earlier federal funding withholdings. - Gov. Walz and Attorney General Keith Ellison are scheduled to testify before the U.S. House Oversight Committee next Wednesday. Summary: The dispute involves federal concerns about Medicaid fraud and Minnesota's response, with funding withheld while officials exchange differing accounts of the problem and remedies. The state is pursuing legislative changes, continuing administrative appeals, and preparing for the oversight hearing next week.