Medicaid Fraud Oversight

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.