Oz orders all 50 states to revalidate Medicaid providers or face scrutiny

FIRST ON FOX: Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz is putting state leaders on notice to root out rampant fraud, directing them in letters Thursday to take immediate action within days to identify and remove noncompliant Medicaid providers.

“Corrupt individuals and organizations masquerading as health care providers are defrauding Medicaid, and American taxpayers, of billions of dollars each year, placing valuable resources out of reach for those the program was intended to serve: low-income senior citizens, children, and disabled individuals. Classes of providers with less rigorous [enrollment standards]…” Oz wrote in a letter, obtained by Fox News Digital, sent to each of the nation’s 50 governors on Thursday morning. 

Oz has given governors and state Medicaid leaders 10 business days to tell CMS whether they will commit to conducting a swift “revalidation” of high-risk Medicaid providers and provide a proposed timetable, alongside a separate 30-day deadline for a broader provider-revalidation strategy, escalating federal pressure on states to tighten anti-fraud enforcement.

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Oz said it is “urgent that action be taken immediately.”

“Failure to [commit to the revalidation plan] will be considered as we evaluate the likelihood of fraud in each state moving forward,” Oz stated. 

States must also submit, within 30 days, a broader two-year strategy outlining how they will review healthcare providers for legitimacy and compliance.

The letters sent to the 50 governors all contained the same information directions, with Fox News Digital obtaining a copy sent to the state of Alabama. 

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“While the factors contributing to fraud are multifaceted and require a comprehensive approach to address, a revalidation process for high-risk providers will immediately deter criminal actors from continuing their fraud schemes, as the federal and state governments closely review and scrutinize the qualifications of providers to suspend or terminate clearly abusive actors from the program,” Oz wrote.

The letters target providers at “high risk of waste, fraud, abuse, and corruption,” particularly those with “less rigorous enrollment and billing requirements,” with CMS directing states to include any provider operating without a National Provider Identifier.

A second letter was also sent to each state Medicaid director reiterating the call for a revalidation strategy tailored to each state.

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“Our analysis of national trends strongly suggests a persistent and growing Medicaid threat posed by sophisticated actors knowingly exploiting these complex systems for financial gain,” Oz wrote.

Proposals must include a methodology and timeline for off-cycle provider revalidation (with emphasis on high-risk providers and those without NPIs); metrics to measure effectiveness and progress (including public reporting); processes for ongoing verification of provider information; strategies to ensure consistency and accuracy of provider data across fee-for-service and managed care systems (including oversight of managed care directories); and coordination with relevant law enforcement partners.

Medicaid fraud has been of particular interest to the Trump administration given the massive fraud scandal that has unfolded in Minnesota.

The push comes amid heightened focus on large-scale fraud cases, including Minnesota’s $250 million “Feeding Our Future” scheme, which became a national flashpoint after surfacing in 2022 and has led to a wave of convictions in recent years.

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A separate state-commissioned review of Minnesota’s Medicaid program this year identified vulnerabilities across 14 high-risk services and estimated that up to $1.7 billion in payments over four years may have been improper — findings that have intensified federal scrutiny and calls for reform.

CMS is also weighing Medicaid deferrals in states including California, New York and Maine, signaling potential legal battles as federal and state officials clash over enforcement.