Vice President JD Vancesaid they are suspending part of California's Medicaid funding following reports of widespread fraudulent activity.

The Trump administration is deferring £1 billion ($1.3 billion) in Medicaid reimbursements to California over concerns that fraudsters are driving up costs shouldered by taxpayers, Vance announced on Wednesday.

He claimed that these bad actors 'put drugs' in unsuspecting patients by encouraging false and unnecessary prescriptions.

'There are California taxpayers and American taxpayers who are being defrauded because California isn't taking its program seriously,' Vance told White House reporters. 'Also you have people who have been prescribed medications that they don't even need.'

'They've had drugs put into their bodies that they don't need because fraudsters have actually encouraged false prescriptions and false administration of medications,' he explained. 'I want to be clear here. We're talking about withholding the Medicaid fraud enforcement payments that go to the state bureaucrats. We're not talking about withholding people's benefits.'

Vance said the decision should serve as a warning to the US's 50 states, all of which will be notified that theirMedicaid Fraud Control Unitscould lose funding 'if they do not aggressively prosecute Medicaid fraud' in their respective states.

Dr. Mehmet Oz, Centres for Medicare and Medicaid Services administrator, said the California Medicaid freeze was the largest deferral they've ever made.

President Trump appointed Vance as the administration's 'fraud czar' last month. The Vice President has since emphasised that blue states like California do not take Medicaid fraud seriously compared to red states.

Oz confirmed the anti-fraud operations include a six-month suspension on new Medicare enrollment for hospices and home health agencies. 'We're making it for a good reason,' he explained. 'We'd like the state to at least come to the table and explain to us how these outlier payments have been generated.'

We hate fraud. But that’s NOT what this is.Vance and Oz are attacking programs that keep seniors and people with disabilities OUT of nursing homes. Pretty sick.Why has IHSS grown in California? It’s simple: Because California is keeping more people OUT of far more expensive…https://t.co/bzmHwR8IMi

Source: International Business Times UK