By New York Post (U.S.) | Created at 2026-08-07 23:26:04 | Updated at 2026-08-07 23:55:59
41 minutes ago
CMS Administrator Dr. Mehmet Oz slammed California leadership for ignoring rampant Medicaid fraud that has plagued the state, claiming powerful unions are the ones benefitting the most and keeping politicians at bay by flooding campaigns with cash.
While the Trump administration has cracked down on the Golden State, deferring roughly $867 million in Medicaid payments in California over fraud concerns, Oz questioned why Governor Gavin Newsom wasn’t apply to identify the same problems with its healthcare system.
“The best way to answer that is to ask cui bono — who benefits? In this case, some of the biggest beneficiaries seem to be the powerful unions that dominate California’s IHSS and the politicians whose campaigns they fund with tens of millions of dollars,” Oz told The Post.
Some of the largest labor unions include SEIU Local 2015, which represents more than 500,000 longterm care workers and United Domestic Workers (UDW), which accounts for more than 200,000 home care and child care providers in California.
The CMS Administrator claims that there is no incentive to crackdown on fraud because unions are able to increase their bottom-line if more people are able to bill Medicaid.
“These incentives create a vicious cycle: Lax program integrity standards mean more demand for caregivers, more caregivers mean more union dues, and more union dues mean more donations for the elected officials who are supposed to be guarding the cash register,” he added.
While joining a union is supposed to be completely optional, Oz accused some of California’s most influential labor organizations of forcing healthcare workers to join instead of offering a choice.
“We believe California has not been doing that,” he said. “In a recent labor complaint, one caregiver claimed that a union representative locked the doors at her orientation and told attendees “no one is leaving” until they’d all signed a union membership card.”
The Department of Justice is investigating allegations of coercion, a senior law enforcement source told The Post.
Other complaints include instances of forged signatures, dues taken before an agreement ever existed, and once case where a caregiver was charged dues for over a year, despite writing “do not wish to participate” on her opt-in form.
“These First Amendment violations are not the reason for our deferrals, but they do help explain the emergence of an ecosystem in which state leadership has every incentive to keep the money flowing and no incentive to ask hard questions,” Oz said.
CMS did not respond when The Post asked what evidence it had identified of alleged coercion by unions or whether any related cases had been referred to the Department of Justice.
Oz acknowledged that the alleged union coercion and First Amendment violations were not the basis for the Trump administration’s decision to defer hundreds of millions of dollars in Medicaid payments.
“They do help explain the emergence of an ecosystem in which state leadership has every incentive to keep the money flowing and no incentive to ask hard questions,” he said.
The Post reached out to SEIU Local 2015 and UDW about the allegations but have not heard back.
Newsom has denied allegations of widespread fraud in California, instead calling it “pure politics.”
“We take fraud seriously. What’s the point of theater?” Newsom said back in July, adding that his administration has been collaborating and providing information with federal authorities.
In July, the Trump administration targeted California’s In-Home Supportive Services (IHSS), a Medicaid-funded program that pays caregivers — often a family member — to help elderly and disabled residents at home instead of moving into a facility.
Oz said California’s spending for in-home services was “twice the rate of the average of the rest of the entire nation.”
It comes just two months after the administration decided to withhold $1.3 billion in Medicaid funding from California in May over mounting concerns tied to the state’s hospice and home-health agencies — bringing the current total over $2 billion.
