Governor Tim Walz and officials from the Minnesota Department of Human Services (DHS) clarified on December 19, 2023, that they lack evidence to support claims suggesting Medicaid fraud in the state could reach as high as $9 billion. This statement follows an announcement from the U.S. Attorney’s Office detailing six new defendants in a series of charges related to Medicaid fraud in Minnesota.
During a briefing, Joseph Thompson, First Assistant U.S. Attorney, referenced an audit conducted by the federal Centers for Medicare and Medicaid Services. The audit covered 14 “high risk” state Medicaid programs and revealed that claims submitted since 2018 totaled approximately $18 billion. Thompson indicated that based on ongoing investigations, he believes “about half or more” of those claims may be fraudulent.
State Officials Respond to Fraud Estimates
Despite the U.S. Attorney’s assertions, state officials stressed that they do not possess information to substantiate the $9 billion figure. James Clark, DHS Inspector General, stated, “I haven’t seen any evidence or information to suggest that there’s $9 billion worth of Medicaid fraud.” Governor Walz described the estimate as “speculation” and questioned its validity, emphasizing the need for concrete evidence from federal authorities.
Walz expressed a desire for collaboration with the U.S. Attorney’s Office, stating, “To extrapolate what that number is for sensationalism… it doesn’t really help us.” He insisted on the importance of realistic assessments to effectively combat Medicaid fraud. John Connolly, deputy commissioner and Medicaid director at DHS, echoed this sentiment, asserting that their evidence indicates “tens of millions of dollars” in fraud specific to Medicaid, excluding other agencies like the Department of Education, which oversees the Feeding Our Future program implicated in a $250 million fraud case.
Detailed Insights on Medicaid Claims
Connolly provided additional context regarding the claims in question. Of the $18 billion total, he noted that $6 billion was processed through a managed care organization, while $10 billion was subject to electronic visit verification, a system that timestamps and tracks service delivery. Furthermore, he specified that $11 billion was authorized by county case managers based on clinical needs.
Walz expressed gratitude for the U.S. Attorney’s efforts but criticized the office for not acknowledging the proactive measures taken by the state. He highlighted that in June, he was granted the authority to halt payments, and by July, payments related to the housing stability stabilization grant were stopped and referred to law enforcement.
As winter progresses, the state has implemented pauses on enrollment and licenses for new providers within certain Medicaid programs, in addition to ceasing payments to suspected fraudulent activities. Clark confirmed that this initiative is expected to persist.
While addressing the challenges of combating fraud, Walz raised concerns about the impact on legitimate service providers within the Medicaid framework. He remarked, “The vast majority… provided incredible services, are now being put at a disadvantage.”
The issue of Medicaid fraud has stirred political tensions at the Capitol. Despite previous bipartisan efforts on various proposals, the atmosphere has become charged. During a recent session, Kristin Robbins, chair of the House Fraud Prevention and State Agency Oversight Policy Committee, noted a lack of trust in sharing fraud tips between parties. She stated that information from a tip line established by the Republican-led committee has been forwarded to federal authorities but not to Democratic legislators or the DHS.
Governor Walz criticized the Republican response, suggesting that solving the issue would not align with their political interests. “It would be the worst thing in the world for them if this is solved,” he claimed, indicating a belief that addressing fraud could affect future political narratives.
The ongoing investigation into Medicaid fraud in Minnesota illustrates the complexities of ensuring accountability while safeguarding the integrity of essential services. As state officials continue to press for collaboration and transparency, the dialogue surrounding these allegations remains contentious.
