Federal Actions This Week Signal The Administration Is Doubling Down On Its Goal To Eliminate Fraud Waste And Abuse

Published in VGM Government Relations on February 27, 2026

This week, the Trump administration, through the Centers for Medicare & Medicaid Services (CMS), announced a significant deferral of federal Medicaid matching funds to Minnesota alongside the release of a new Request for Information (RFI) tied to the administration’s Comprehensive Regulations to Uncover Suspicious Healthcare (CRUSH) initiative. These actions along with the changes to DMEPOS accreditation and enrollment signal the administration’s aggressive posture on Medicaid and Medicare program integrity, with direct implications for state Medicaid programs, providers, and suppliers nationwide. 

Trump Administration Defers Minnesota Medicaid Funding 

On Wednesday, CMS announced the deferral of $259.5 million in quarterly federal Medicaid matching funds to Minnesota, citing concerns related to program integrity and alleged fraudulent or unsupported claims. According to CMS, the deferral is intended to prevent payment of questionable claims while the agency conducts further review and evaluates Minnesota’s corrective action plan.  

CMS has emphasized that Medicaid is jointly funded by states and the federal government and that federal law requires CMS to ensure funds are spent lawfully and with adequate safeguards against fraud, waste, and abuse. 

Federal officials stated that the deferred amount is tied to a review of Minnesota’s Medicaid expenditures for late fiscal year 2025 and that the funds may be released once CMS is satisfied with the state’s remedial actions.  

Minnesota officials, in contrast, have characterized the deferral as harmful to the state’s healthcare infrastructure and have indicated that an appeal is underway. While CMS has asserted that beneficiaries should not experience service disruptions, the move has heightened concern among providers reliant on timely Medicaid reimbursement. 

CMS Initiates Broad Federal Fraud Enforcement 

This action is part of a broader federal effort to depart from what CMS leadership has described as a traditional “pay-and-chase” model of fraud enforcement toward earlier detection and prevention. CMS leadership has indicated that heightened scrutiny will focus on areas of rapid spending growth and services deemed at higher risk for improper payments. These actions are occurring alongside other enforcement tools, including temporary moratorium on certain provider and supplier enrollments in Medicare. 

For Medicare and Medicaid providers, CMS’ approach underscores the growing importance of robust compliance programs and documentation and billing procedures capable of withstanding federal review. State Medicaid programs may also face increased pressure to demonstrate effective oversight mechanisms as a condition of continued federal financial participation. 

The CRUSH Initiative and RFI 

Also this week, CMS released an RFI seeking stakeholder input on potential regulatory changes under the Comprehensive Regulations to Uncover Suspicious Healthcare (CRUSH) initiative. The CRUSH RFI solicits feedback on how CMS can strengthen its ability to prevent, detect, and respond to fraud, waste, and abuse across government funded programs. 

The RFI indicates that the CRUSH initiative is intended to inform a future proposed rule and to include both regulatory and programmatic changes. The comment period is open for 30 days following publication of the RFI in the Federal Register. VGM will be submitting comments on behalf of its membership and the DMEPOS industry. 

Potential Implications for Suppliers 

The RFI signals CMS’s intent to expand its fraud prevention and will likely focus on enhanced data analytics, tighter enrollment and revalidation standards, expanded reporting obligations, and greater use of real-time payment controls. Suppliers, particularly those operating in fast high-growth or historically scrutinized product categories, should expect increased federal scrutiny of billing patterns, ownership structures, and compliance controls. 

In an unprecedented move by CMS, the CRUSH initiative is occurring alongside a nationwide enrollment moratorium for DMEPOS suppliers, further reinforcing CMS’s consistent messaging that program integrity concerns are a top enforcement priority. See van Halem Group’s FAQ on the moratorium here.  

VGM has a longstanding history of fighting back against Fraud, Waste, and Abuse through reporting, education, and outreach to members and patients alike. VGM strongly encourages stakeholders to submit comments to ensure that their voice is heard and to ensure that future regulations balance fraud prevention with patient access and administrative feasibility. 

These actions taken by the administration and CMS this week make one thing clear; the administration is doubling down on its stated commitment to federal healthcare fraud oversight. Providers need to act now to ensure compliance with federal and state regulations and be prepared for heightened scrutiny going forward. VGM will continue to provide support and education as more information becomes available.