The Department of Health and Human Services said Tuesday that it deferred more than $1 billion in federal Medicaid reimbursements to California and Minnesota while the states provide additional documentation for claims identified during financial reviews.

HHS placed approximately $867.5 million in California payments and $199 million in Minnesota payments on hold. The department said California's review concerns certain in-home care claims and unusually rapid spending growth. Minnesota's review covers 14 service areas and claims involving providers or billing patterns flagged for closer examination.

A deferral is not a permanent funding cut and is not, by itself, a finding that fraud occurred. Both states may submit records showing that the expenditures qualify for federal matching funds. HHS did not provide a timetable for completing the reviews in its announcement.

Minnesota has separately extended a pause on new provider enrollment in 12 higher-risk services while it revalidates existing providers. State officials say stronger oversight is needed but have also warned that prolonged federal deferrals could disrupt health-care delivery.

Source: U.S. Department of Health and Human Services — hhs.gov source ↗

Source: Minnesota Department of Human Services, provider revalidation update — mn.gov source ↗

Source: Minnesota Department of Human Services, statement on federal deferrals — mn.gov source ↗