Minnesota Attorney General Keith Ellison testifies during a Senate Homeland Security and Governmental Affairs oversight hearing in February. Ellison announced Monday that he’s suing the federal government for withholding state Medicaid funds. Photo by Bonnie Cash/UPI | License Photo
Minnesota Attorney General Keith Ellison and the state’s Department of Human Services filed a lawsuit against the federal government for withholding $259 million in Medicaid funds.
Last week, Vice President JD Vance and Centers for Medicare and Medicaid Services Administrator Mehmet Oz announced the withholding of funds saying it was because of alleged Medicaid fraud in the state.
On Monday, Ellison announced the suit against CMS and HHS. He said he would also request the court to issue a temporary restraining order against Oz and Health and Human Services Secretary Robert F. Kennedy Jr. to stop them from withholding funds.
“The Trump Administration’s M.O. is to cut first, no matter what the law says or who gets hurt, and ask questions later, if at all,” Ellison said in a statement “These cuts are the latest in a long series of efforts to go around the law to punish Minnesotans — but just as we fought back and won when they illegally tried to cut funding for childcare, hungry families and our schools, we are suing them again today to make them follow the law.
“Fighting fraud should be bipartisan but the Trump Administration not only hasn’t helped the fight against fraud, they’ve actually harmed it,” Ellison added. “Trump’s attempts to look like he’s fighting fraud only punish the people and families who most need the high-quality, affordable healthcare that all Minnesotans deserve.”
The saga of funding the state began on Jan. 6, when the Trump administration announced that it would withhold more than $2 billion a year for “noncompliance.”
Minnesota appealed and, “to this date, has not yet been told how it is noncompliant or what it can do to remedy the Administration’s concerns,” the suit says. “Impatient that it cannot withhold the $2 billion until Minnesota is provided a hearing and other due process, the Administration ‘deferred’ $243 million from the State on Feb. 25.”
The suit said there is “no avenue to Minnesota for relief. Although, in theory, CMS has only 90 days to decide whether to pay a claim, CMS regularly evades the 90-day deadline by claiming that the state’s submissions are insufficient or by demanding additional information so that the 90-day deadline never begins.”
Ellison alleges that the administration is giving the state the runaround.
On Jan. 20, 2026, CMS told the state it would provide documents necessary for the appeal, but hasn’t offered them, the press release from Ellison said. “According to CMS, they have been unable to obtain the documents from senior leadership. As such, no hearing has yet been scheduled on the noncompliance notice.”
