CMS Launches Medicaid Probes in Six Blue States as Vance Names $15M Maine Fraud Case and Enforcement Escalates Nationally

What's New

On May 27, 2025, the Centers for Medicare & Medicaid Services announced it is ramping up financial audits of at least six Democratic-led states — California, Colorado, Illinois, Minnesota, Oregon, and Washington — over illegal use of federal Medicaid dollars to cover health care for people in the country illegally, according to CMS directly.

CMS Administrator Dr. Mehmet Oz put it plainly: "Medicaid is not, and cannot be, a backdoor pathway to subsidize open borders."

The agency is reviewing CMS-64 form submissions, state financial management systems, and eligibility policies. Any improper spending will trigger recoupment of the federal share. That's a bill.

California Is the Biggest Target

California self-reported overcharging the federal government by at least $500 million for health care delivered to immigrants without legal status, according to KFF Health News and the Associated Press via California Healthline.

CMS sent California a letter dated March 18 threatening to pursue "all available enforcement strategies" including reducing federal funding and referring the state to the Attorney General for a potential lawsuit.

California turned itself in — and the number is half a billion dollars.

Colorado, Illinois, and Minnesota have already had to cut or scale back their immigrant Medicaid programs because costs exploded beyond what their budgets could handle. The math caught up with the politics.

Vance in Maine: A Name, a Company, a Number

VP Vance traveled to Bangor, Maine on Thursday to headline a rally for former Gov. Paul LePage's congressional bid. He didn't traffic in vague accusations. He named a person.

Rakiya Mohamed, associated with a company called Bright Future Healthier You, fraudulently billed Maine's Medicaid program for interpreter services that were never provided — collecting $15 million over five years, according to the Bangor Daily News.

Mohamed pleaded guilty in March to filing a false tax return. Three others were indicted in the scheme: company president Abdihamid Hassan, Abdifatah Abdi, and Asmo Dol — who died in June shortly after pleading not guilty.

Vance called Maine "the bronze medalist in fraud after California and Minnesota" and accused then-Democratic Attorney General Janet Mills of refusing to prosecute these cases when LePage flagged them.

"I can't promise but I suspect we're going to find hundreds of millions of more dollars every single month that we look in the state of Maine," Vance said.

The Blue-State Enforcement Gap — Real Data

Vance also dropped a comparison that mainstream outlets largely ignored.

Hawaii runs a Medicaid program that has received billions in federal funding. Number of Medicaid fraud convictions or indictments in recent years: zero, according to Vance.

New York has a $100 billion Medicaid program and produced nine indictments in the past year. Indiana — with roughly one-third of New York's population — had more than four times as many indictments over the same period, Vance said.

Rep. Greg Steube (R-FL) went on Fox Business and said blue states are "perpetuating the fraud" deliberately — to inflate spending numbers and pull more federal dollars into their states. That's an accusation, not a fact. But the enforcement numbers Vance cited are real, and nobody on the left is disputing them.

Here's What Republican Politicians Got Wrong

President Trump claimed on Truth Social that his "One Big Beautiful Bill" would "kick millions of Illegal Aliens off of Medicaid" to protect it for Americans who need it. That's not accurate, according to FactCheck.org.

People in the country illegally are already not eligible for Medicaid except for emergency services. What the bill actually does is reduce federal funding to states that run state-funded health programs for undocumented immigrants — programs that are separate from Medicaid by definition.

The Congressional Budget Office estimated 1.4 million people would lose coverage — but those are people on state-funded programs, not Medicaid. Georgetown University research professor Leonardo Cuello told FactCheck.org directly: "A state-funded program is by definition not Medicaid."

The Senate GOP's official X account made the same false claim. The House Energy and Commerce Committee made the same false claim.

The underlying policy goal — cutting off federal dollars to states subsidizing illegal immigrant health care — is legitimate and legally defensible. But the White House and GOP leaders overstated what the bill does, and that sloppiness gives opponents a factual hook to attack the whole effort.

State the truth accurately. You don't need to embellish a $500 million California admission.

What This Means for You

Federal auditors are now inside the books of six states. California already admitted to a half-billion-dollar overcharge. Maine fraud with a single name attached runs $15 million. Minnesota fraud — covered in our previous reporting — was just the opening act.

CMS will soon determine whether it pursues recoupment or uses this as leverage in broader budget negotiations. So far, it's letters and announcements. The real test is whether a single dollar gets clawed back.