Minnesota Governor Initiates Third-Party Audit in Response to Medicaid Fraud
On Wednesday, Minnesota Governor Tim Walz announced that he has mandated third-party audits for claims related to 14 high-risk Medicaid services due to a significant issue with fraud within the state government.
The governor’s office noted that the Minnesota Department of Human Services (DHS) collaborates with Optum, a company that reviews Medicaid fee-for-service claims data and flags potential issues for further inspection by DHS. Optum’s reviews help pinpoint fraudulent activities, which include missing documentation, excessively high billing patterns, and inconsistencies suggesting that the billed services might not actually meet program criteria.
DHS identified these 14 Medicaid services as high risk based on their program vulnerabilities and evidence of fraud, or through data analysis that revealed suspicious billing patterns or anomalies.
Payments for these services will be paused for up to 90 days while the audits are conducted, as reported by Walz’s office. The services affected encompass a range of areas, including early developmental behavioral interventions for autism, community support, non-emergency medical transportation, and various mental health and personal care assistance services, among others.
“Programs designed to assist the most disadvantaged communities rely heavily on public trust. To restore that trust, we are suspending these programs that, sadly, have become targets of fraudulent activity,” Walz stated in a press release.
The claims flagged by Optum will undergo verification by DHS to ensure that the billed services were actually rendered. Any allegations of misconduct will be referred to the agency’s Office of Inspector General for potential investigation.
Assistant U.S. Attorney Joe Thompson has previously described the extent of Medicaid fraud in Minnesota as “staggering.” He remarked that the existing verification system is ineffective, stating that abuse of these programs has become rampant, overshadowing legitimate services. This comment followed his announcement of charges against eight individuals accused of fraud in the state’s Housing Stability Services program, which is now being shut down.
Moreover, charges were also announced in September against a woman for allegedly defrauding an early intensive developmental and behavioral intervention program.
Lawmakers Respond
In light of Walz’s announcement, Minnesota House Speaker Lisa Demuth and House Minority Leader Harry Niska issued a joint statement expressing their shock at the identification of just 14 programs being considered at high risk for Medicaid fraud. “This reveals that the fraud crisis is deeper and broader than the administration has suggested,” they stated.
They emphasized that independent audits are crucial in preventing and stopping fraud in Minnesota, reiterating the need for legislation to establish an Office of Inspector General for enhanced accountability and transparency in the state government.
Senate Minority Leader Mark Johnson commented that the third-party audit feels like a desperate attempt from a governor lacking a solid record in safeguarding program integrity meant to assist those in need. He noted that Republicans had proposed robust anti-fraud measures that were repeatedly obstructed by the Walz administration.
