Minnesota Audit Finds DHS Failed for Years to Investigate Medicaid Kickback Allegations in Autism Program
A new report from Minnesota’s Office of the Legislative Auditor, released Tuesday, concludes the state Department of Human Services’ Office of Inspector General had clear legal authority since the late 1990s to investigate Medicaid kickbacks but failed to do so for years, allowing suspected fraud in the Early Intensive Developmental and Behavioral Intervention (EIDBI) autism program to slip through. Auditors found DHS declined to pursue three separate kickback allegations between 2021 and 2023, did not refer them to law enforcement or any other agency, and did not even flag them for further review, all while the EIDBI budget ballooned from about $3 million in 2018 to nearly $400 million in 2023. The report also identifies a long‑standing error in DHS administrative rules that may have limited the department’s ability to suspend payments during kickback probes and urges DHS to revise its definition of “fraud” to explicitly include kickbacks, with lawmakers told to intervene if it does not. DHS, in a written response included in the report, now agrees the definition should be clarified, but the findings are already drawing sharp criticism from Republicans such as House Fraud Prevention Committee Chair Kristin Robbins, who accuses DHS and Gov. Tim Walz’s administration of tolerating “rampant fraud.” The audit lands as federal CMS, led by Dr. Mehmet Oz, is already freezing hundreds of millions in Minnesota Medicaid reimbursements over broader fraud concerns, intensifying pressure on the state’s oversight systems and on national debates over how aggressively to police misuse of federal health‑care dollars.
📌 Key Facts
- The Minnesota Office of the Legislative Auditor released a report Tuesday on DHS investigations of alleged kickbacks in the Medicaid‑funded EIDBI autism program.
- Auditors found DHS’s Office of Inspector General has had authority since the late 1990s to investigate kickbacks on their own, contradicting the agency’s claim it could only act when kickbacks were tied to other fraud.
- From 2021 to 2023, DHS declined to investigate or refer three identified kickback allegations and did not flag them for further review.
- The EIDBI program’s budget grew from roughly $3 million in 2018 to nearly $400 million in 2023, amid documented fraud schemes using kickbacks to attract families and drive inflated Medicaid billing.
- The report urges DHS to amend its administrative rule defining “fraud” to clearly cover kickbacks and notes a decades‑old rule error that may have hindered suspension of payments during investigations.
📊 Relevant Data
In Minnesota fraud cases from 2020 to 2025, 82 out of 92 indicted suspects (89%) were Somali American, indicating a significant overrepresentation given that Somali Americans comprise about 1.4% of Minnesota's population (approximately 80,000 out of 5.7 million).
2020s Minnesota fraud scandals — Wikipedia
Somali children in Minnesota have a higher autism prevalence, with 1 in 12 (8.26%) 8-year-old Somali children identified with autism compared to 1 in 28 (3.62%) Hmong children and lower rates in other groups, contributing to increased demand for EIDBI services.
Press Briefing 9-26-25 — MN-ADDM
The Somali community in Minnesota largely arrived as refugees fleeing the Somali civil war starting in 1991, resettled under the U.S. Refugee Act of 1980, with Minnesota's volunteer agencies and welcoming policies facilitating concentration in the Twin Cities area.
How Minnesota became the center of the Somali diaspora — Sahan Journal
📰 Source Timeline (1)
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