Centers for Medicare & Medicaid Services (CMS) Administrator Mehmet Oz on Friday warned Minnesota Gov. Tim Walz the state could lose federal Medicaid funding unless it restores "the integrity" of its program.
In a post on X, Dr. Oz claimed more than $1 billion had been stolen through a massive Medicaid fraud scheme carried out by "bad actors" within Minnesota’s Somali community, alleging some of the funds "may have even made its way to the Somalian terrorist group (al-Shabab)."
"Our staff at CMS told me they’ve never seen anything like this in Medicaid — and everyone from Gov. Tim Walz on down needs to be investigated, because they’ve been asleep at the wheel," Oz said.
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Oz demanded Walz take the following corrective measures within 60 days:
"If we’re unsatisfied with the state’s plans or cooperation, we’ll stop paying the federal share of these programs," Oz warned.
The CMS administrator pointed to two Minnesota Medicaid programs launched in recent years, noting dramatic spikes in costs.
The Housing Stabilization Services program, projected at $2.6 million annually, paid out over $100 million in 2024, according to Oz.
The Early Intensive Developmental and Behavioral Intervention program grew from $3 million in 2018 to nearly $400 million in 2023, he said.
"These scammers used stolen taxpayer money to buy flashy cars, purchase overseas real estate and offer kickbacks to parents who enrolled their kids at fake autism treatment centers," Oz said. "Some of it may have even made its way to the Somalian terrorist group al-Shabab. … So why didn’t Walz stop them? That’s simple: because he went all-in on identity politics."
Minnesota officials previously reported the problem to CMS but failed to address it effectively, according to Oz.
"We stepped in and shut down the worst program: housing. We also froze provider enrollment in a few of the most abused programs," Oz said.
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"The message to Walz is clear: either fix this in 60 days or start looking under your couch for spare change, because we’re done footing the bill for your incompetence."
President Donald Trump recently announced a flurry of actions to crack down and investigate fraud schemes in Minnesota, which he has assailed as a "hub of money laundering activity," and cited it as the basis of his decision to terminate deportation protections for hundreds of Somali migrants.
This week, senior Trump administration officials announced fresh investigations, including a new Treasury Department probe into how taxpayer dollars were allegedly diverted to the terrorist organization al-Shabab, according to Secretary Scott Bessent.
Walz's office did not immediately respond to Fox News Digital's request for comment.
Fox News Digital's Breanne Deppisch contributed to this report.