On December 5, 2025, Dr. Mehmet Oz, the Administrator of the Centers for Medicare & Medicaid Services (CMS), issued a warning to Minnesota Governor Tim Walz regarding serious allegations of fraud within the state's Medicaid program. Dr. Oz indicated that more than $1 billion may have been misappropriated, with claims suggesting that some of these funds could have been diverted to the terrorist organization al-Shabab.

Dr. Oz outlined a series of corrective actions that the state must implement within 60 days to avoid losing federal Medicaid funding. These actions include providing weekly updates on anti-fraud measures, freezing enrollment of high-risk providers for six months, verifying the legitimacy of current providers, and submitting a comprehensive corrective action plan to prevent future fraud. He emphasized the urgency of these measures, warning that failure to comply could lead to the cessation of federal funding for these programs.

The CMS administrator highlighted alarming increases in costs associated with two specific Minnesota Medicaid programs. The Housing Stabilization Services program, initially projected to cost $2.6 million annually, has reportedly exceeded $100 million in payouts for 2024. Similarly, the Early Intensive Developmental and Behavioral Intervention program's costs surged from $3 million in 2018 to nearly $400 million in 2023.

Dr. Oz criticized the state’s previous handling of the fraud allegations, stating that while Minnesota officials had reported the issue to CMS, they had not taken effective action to address it. He noted that CMS had previously intervened by shutting down the most problematic program and freezing provider enrollment in areas identified as high-risk for abuse.

In a related context, former President Donald Trump has labeled Minnesota as a center for money laundering and has initiated investigations into alleged fraud schemes, which has raised concerns about the implications for the Somali community in Minnesota. This scrutiny has coincided with broader discussions about immigration policy and social equity, particularly as the Somali community faces increased challenges amid these allegations. The situation underscores the intersection of public welfare program integrity and the social dynamics within the state, as Governor Walz's office has yet to respond to requests for comment regarding the ongoing situation.