The US government is threatening to withhold Medicaid funds from all 50 states if they fail to comply with federal anti-fraud statutes. The threat comes from a letter sent to states by the Department of Health and Human Services inspector general, which requires them to demonstrate they are effectively and aggressively prosecuting Medicaid fraud in their states. The federal government is also deferring over $1 billion in Medicaid reimbursements from California over fraud.