House Panel and Whistleblowers Detail Minnesota DHS Failures as 'Industrial‑Scale' Medicaid Fraud Probe Expands
A House panel has opened what it calls an "industrial‑scale" probe into Minnesota's Medicaid program, expanding scrutiny and warning that demands on Gov. Tim Walz are "just the beginning." Whistleblower Faye Bernstein, a 20‑year Minnesota DHS contract‑management and compliance official, says lax contracting and a lack of guardrails by 2018–2019 left the agency open to fraud and that she was silenced and sidelined after raising concerns—while internal 2024 emails show members of the public repeatedly warned DHS about suspected fraud; the agency says federal data put the state's Medicaid improper‑payment rate at about 2.1% versus 6.1% nationally and that it has strong internal controls it is working to improve.
📌 Key Facts
- Whistleblower Faye Bernstein, a 20‑year Minnesota Department of Human Services (DHS) employee who worked in contract management and compliance, has raised concerns about the agency's contracting practices.
- Bernstein says that by 2018–2019 she observed DHS contracting processes that were 'leaving us completely open to fraud' and that the 'lack of guardrails was pretty shocking.'
- She alleges retaliation after raising concerns: she was told to stop asking questions, labeled insubordinate, had most duties reassigned, and was shuffled between jobs.
- Bernstein says internal DHS emails from 2024 show members of the public repeatedly warned the agency about suspected fraud, raising questions about whether DHS ignored those tips.
- Minnesota DHS responded that new federal data show the state’s Medicaid improper‑payment rate is about 2.1% versus 6.1% nationally, saying the agency has 'strong internal controls,' is working to improve them, and could serve as a 'national model' for fraud prevention.
📰 Source Timeline (2)
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- Whistleblower Faye Bernstein, a 20‑year Minnesota DHS employee in contract management and compliance, says that by 2018–2019 she saw department contracting processes 'leaving us completely open to fraud' and was 'shocked' by the lack of guardrails.
- Bernstein alleges she was told to stop asking questions, labeled insubordinate, had most duties reassigned and was shuffled between jobs after raising concerns about risky contracts.
- She says internal DHS emails from 2024 show members of the public repeatedly warned the agency about suspected fraud, raising questions about whether DHS ignored those tips.
- Minnesota DHS responded that new federal data show the state’s Medicaid improper‑payment rate is about 2.1% versus 6.1% nationally and claims it has 'strong internal controls' it is working to improve, framing Minnesota as a potential 'national model' for fraud prevention.