HHS did not disclose how much of its $1.07 billion Medicaid deferral was new

By Cumulant Research

HHSHHSHHS is the U.S. Department of Health and Human Services, the federal department that contains CMS. [HHS](https://www.hhs.gov/press-room/hhs-defers-medicaid-payments-california-minnesota-fraud-review.html) said it was temporarily deferring approximately $867.5 million in federal MedicaidMedicaidMedicaid is a health-coverage program financed jointly by federal and state governments and administered by states under federal rules. [Bipartisan Policy Center](https://bipartisanpolicy.org/explainer/medicaid-payment-deferrals-what-they-are-and-how-they-work/) payments to California and $199 million to Minnesota. The agency said California's amount concerned certain in-home care programs and Minnesota's concerned claims in 14 high-risk service areas. [HHS](https://www.hhs.gov/press-room/hhs-defers-medicaid-payments-california-minnesota-fraudfraudFraud involves deliberately misrepresenting facts to obtain something of value, and it is not interchangeable with an unsupported or improper payment. [GAO](https://www.gao.gov/products/gao-24-106608)-review.html)

The public release did not identify the Form CMS-64Form CMS-64Form CMS-64 is the quarterly report through which a state submits summarized Medicaid expenditures and adjustments to CMS. [Medicaid.gov](https://www.medicaid.gov/medicaid/financial-management/state-budget-expenditure-reporting-for-medicaid-and-chip/expenditure-reports-mbes/cbes) reporting quarters, deferraldeferralA deferral is a temporary exclusion of a questioned Medicaid claim from a federal grant award while CMS seeks information needed to decide whether the expenditure qualifies. [42 CFR 430.40](https://www.ecfr.gov/current/title-42/part-430/section-430.40) numbers, individual claim lines or exact calculations behind either amount. Those omissions prevent the central calculation: the public can add the announced figures, but it cannot determine how much represents newly deferred expenditure, how much was represented in earlier actions, or how much remains unpaid. The Associated Press separately reported that HHS did not specify whether the July amounts were additional to or overlapped earlier deferrals. [HHS](https://www.hhs.gov/press-room/hhs-defers-medicaid-payments-california-minnesota-fraud-review.html) [Associated Press](https://apnews.com/article/medicaid-fraud-minnesota-california-oz-rfk-trump-24033ef9807b46f8b6fd6614ef5b1169)

A Medicaid deferral works like one partner pausing reimbursement after the other partner has paid a bill and asking to see the supporting records. Federal rules permit CMSCMSCMS is the Centers for Medicare & Medicaid Services, the federal agency that oversees Medicaid's federal requirements and funding. [HHS](https://www.hhs.gov/press-room/hhs-defers-medicaid-payments-california-minnesota-fraud-review.html) to exclude a questioned claim from a grant award when the agency needs more information to determine whether the expenditure qualifies. [42 CFR 430.40](https://www.ecfr.gov/current/title-42/part-430/section-430.40)

That is different from a disallowancedisallowanceA disallowance is CMS's decision after review that a claim does not qualify for federal reimbursement. [Bipartisan Policy Center](https://bipartisanpolicy.org/explainer/medicaid-payment-deferrals-what-they-are-and-how-they-work/), which is a decision that a claim does not qualify for federal reimbursement. HHS itself described the July actions as temporary deferrals rather than permanent funding cuts and said the states could submit documentation supporting the claims. [HHS](https://www.hhs.gov/press-room/hhs-defers-medicaid-payments-california-minnesota-fraud-review.html) [Bipartisan Policy Center](https://bipartisanpolicy.org/explainer/medicaid-payment-deferrals-what-they-are-and-how-they-work/)

It is also too early to call the entire deferred amount fraudulent. HHS framed the reviews as part of a fraud crackdown, but its release said the claims required additional review. GAO explains that fraud requires willful misrepresentation and that improper or unsupported payments are not automatically fraudulent. [HHS](https://www.hhs.gov/press-room/hhs-defers-medicaid-payments-california-minnesota-fraud-review.html) [GAO](https://www.gao.gov/products/gao-24-106608)

The absence of a detailed public notice on announcement day does not establish a violation of federal rules. The regulation gives CMS up to 15 days after taking a deferral action to send the state a written notice identifying the type and amount of the claim and the reason for deferral. This article evaluates the public record available on July 21. [42 CFR 430.40](https://www.ecfr.gov/current/title-42/part-430/section-430.40)

States use Form CMS-64 to report summarized Medicaid expenditures to CMS each quarter. The reporting system can also carry adjustments related to earlier periods. [Medicaid.gov](https://www.medicaid.gov/medicaid/financial-management/state-budget-expenditure-reporting-for-medicaid-and-chip/expenditure-reports-mbes/cbes)

That process produces three different quantities. Gross announced actionsGross announced actionsGross announced actions is the sum of published deferral amounts before removing any duplicated expenditures or subsequent resolutions. are the amounts stated across notices. Unique deferred dollarsUnique deferred dollarsUnique deferred dollars counts each underlying expenditure once, even if that expenditure appears in more than one announcement. count each underlying expenditure once. The current outstanding balancecurrent outstanding balanceThe current outstanding balance is the amount still unpaid after accounting for released funds, state adjustments, revised estimates and disallowances. goes further by accounting for money later released, state reductions, revised estimates and claims that CMS ultimately disallows. The public documents support the first calculation, but not the second or third. [42 CFR 430.40](https://www.ecfr.gov/current/title-42/part-430/section-430.40) [Bipartisan Policy Center](https://bipartisanpolicy.org/explainer/medicaid-payment-deferrals-what-they-are-and-how-they-work/)

Five alarm calls do not reveal how many separate fires there are, or whether an earlier alarm has been cleared.

Minnesota's February 25 notice deferred exactly $259,505,491 for expenditures reported for the quarter ended September 30, 2025. Its April 29 notice deferred exactly $91,173,859 for expenditures reported for the quarter ended December 31, 2025. California's May 13 notice issued a negative grant award of exactly $1,343,711,974 for its report covering the quarter ended December 31, 2025. [Minnesota February notice](https://ccf.georgetown.edu/wp-content/uploads/2026/03/Q4-2025-MN-Deferral-Letter-final-daf.pdf) [Minnesota April notice](https://ccf.georgetown.edu/wp-content/uploads/2026/05/MN-Deferral-Letter-FMG-04.29.2026-daf-1-1.pdf) [California May notice](https://www.cms.gov/files/document/deferral-letter-ca-q1-2026.pdf)

Those three written notices total exactly $1,694,391,324. Adding HHS's approximate July figures produces about $2.761 billion in gross announced actions. That arithmetic is reproducible, but calling the result unique exposure, fraud, economic loss or money still being withheld would add information the records do not contain. [HHS](https://www.hhs.gov/press-room/hhs-defers-medicaid-payments-california-minnesota-fraud-review.html) [California May notice](https://www.cms.gov/files/document/deferral-letter-ca-q1-2026.pdf) [Minnesota February notice](https://ccf.georgetown.edu/wp-content/uploads/2026/03/Q4-2025-MN-Deferral-Letter-final-daf.pdf) [Minnesota April notice](https://ccf.georgetown.edu/wp-content/uploads/2026/05/MN-Deferral-Letter-FMG-04.29.2026-daf-1-1.pdf)

The comparison breaks at July. The earlier documents connect exact amounts to quarterly reports and deferral identifiers. The July release provides rounded totals and broad service descriptions without those fields. The five rows therefore cannot be treated as a consistent time series of outstanding balances. [HHS](https://www.hhs.gov/press-room/hhs-defers-medicaid-payments-california-minnesota-fraud-review.html) [California May notice](https://www.cms.gov/files/document/deferral-letter-ca-q1-2026.pdf) [Minnesota February notice](https://ccf.georgetown.edu/wp-content/uploads/2026/03/Q4-2025-MN-Deferral-Letter-final-daf.pdf) [Minnesota April notice](https://ccf.georgetown.edu/wp-content/uploads/2026/05/MN-Deferral-Letter-FMG-04.29.2026-daf-1-1.pdf)

Minnesota's April notice is the clearest warning against treating repeated issues as repeated transactions. CMS called all three April lines repeat deferrals because they continued unresolved concerns from earlier periods. Yet the April action covered the quarter ended December 31, 2025, while the February action covered the quarter ended September 30, 2025. The concern repeated; the reported quarter changed. [Minnesota February notice](https://ccf.georgetown.edu/wp-content/uploads/2026/03/Q4-2025-MN-Deferral-Letter-final-daf.pdf) [Minnesota April notice](https://ccf.georgetown.edu/wp-content/uploads/2026/05/MN-Deferral-Letter-FMG-04.29.2026-daf-1-1.pdf)

California's May notice shows a different kind of overlap control. While estimating its home-care deferral, CMS reduced one component by $79,971,176 to avoid duplicating concerns already represented in another component. That adjustment shows why a reconciliationreconciliationA reconciliation is a record that connects announced amounts to individual claims and shows which amounts are new, repeated, adjusted, paid or disallowed. needs claim-level calculations rather than a comparison of broad program labels. It does not reveal whether the May and July actions overlap. [California May notice](https://www.cms.gov/files/document/deferral-letter-ca-q1-2026.pdf)

The shared subject matter therefore proves neither independence nor duplication. July could cover later-quarter claims tied to old concerns, a re-estimate of earlier expenditures, or some of each. The press release does not contain the records needed to choose among those explanations. [HHS](https://www.hhs.gov/press-room/hhs-defers-medicaid-payments-california-minnesota-fraud-review.html)

These scenarios are accounting possibilities, not allegations about intent. Similar program descriptions can appear in different quarters because states report new spending every quarter. Conversely, a revised estimate or repeated claim population can preserve some of the same underlying expenditure. Only identifiers, reporting periods and a line-by-line bridge can distinguish the cases. [Medicaid.gov](https://www.medicaid.gov/medicaid/financial-management/state-budget-expenditure-reporting-for-medicaid-and-chip/expenditure-reports-mbes/cbes) [Minnesota April notice](https://ccf.georgetown.edu/wp-content/uploads/2026/05/MN-Deferral-Letter-FMG-04.29.2026-daf-1-1.pdf)

A complete public reconciliation would require a small set of fields that appeared in the earlier written notices but not in the July press release. [HHS](https://www.hhs.gov/press-room/hhs-defers-medicaid-payments-california-minnesota-fraud-review.html) [California May notice](https://www.cms.gov/files/document/deferral-letter-ca-q1-2026.pdf) [Minnesota April notice](https://ccf.georgetown.edu/wp-content/uploads/2026/05/MN-Deferral-Letter-FMG-04.29.2026-daf-1-1.pdf)

• The Form CMS-64 reporting quarter covered by each July amount.
• The deferral number and service line assigned to each component.
• The exact amount behind each rounded July total.
• A bridge showing whether each component is new, a later-quarter repeat, a re-estimate or the same expenditure represented earlier.
• The amount from each earlier action that has since been paid, reduced, revised or disallowed.

Federal rules require the written notice sent to a state to identify the type and amount of the deferred claim and the reason for deferral. If CMS publishes those notices or a later reconciliation, the calculation can be updated. [42 CFR 430.40](https://www.ecfr.gov/current/title-42/part-430/section-430.40)

This analysis identifies an accounting and disclosure gap. It does not estimate a market reaction, a loss to taxpayers or an economic effect on providers and beneficiaries. HHS's announcement describes a temporary administrative action, while KFF warns more generally that prolonged deferrals can create uncertainty for state budgets. The available sources do not quantify any July-specific downstream effect. [HHS](https://www.hhs.gov/press-room/hhs-defers-medicaid-payments-california-minnesota-fraud-review.html) [KFF](https://www.kff.org/medicaid/what-to-know-about-recent-federal-actions-involving-state-medicaid-program-integrity/)

The defensible conclusion is narrower: HHS announced approximately $1.0665 billion in July deferrals, but the public release did not provide enough information to calculate how much was newly deferred or how much remains unpaid across all five actions. [HHS](https://www.hhs.gov/press-room/hhs-defers-medicaid-payments-california-minnesota-fraud-review.html) [Associated Press](https://apnews.com/article/medicaid-fraud-minnesota-california-oz-rfk-trump-24033ef9807b46f8b6fd6614ef5b1169)