This article may contain commentary
which reflects the author’s opinion.
A top federal prosecutor said Thursday that the total scope of fraud in Minnesota could reach $9 billion or more. First Assistant U.S. Attorney Joe Thompson said 14 Medicaid service programs flagged as “high risk” for fraud have cost the state $18 billion since 2018.
While investigators believe a significant portion of that spending was fraudulent, Thompson said the precise amount remains under investigation, CBS News reported.
“I don’t make these generalizations in a hasty way,” he said, per CBS. “When I say significant amount, I’m talking on the order of half or more. But we’ll see. When I look at the claims data and the providers, I see more red flags than I see legitimate providers.”
Minnesota Department of Human Services Inspector General James Clark said in a statement that speculation about the scale of fraud is “shocking.”
“If there is evidence of Medicaid fraud, the state should be given the information so DHS can slam the door shut on payments to those individuals and businesses,” Clark said, per the outlet. “We have been moving more aggressively than ever to suspend payments where we see evidence of fraud and refer criminals to law enforcement for prosecution.
“I’ve previously sent letters to the U.S. Attorney’s Office asking them to share evidence of fraud and I’m requesting a meeting immediately to discuss how we can partner to stop criminals now,” he added.
Thompson said the scale of fraud in Minnesota surpasses that seen in other states and threatens services for people who genuinely depend on them.
While fraud cases often involve providers inflating bills, Thompson said at a Minneapolis news conference that some companies were set up to deliver no services at all, instead siphoning federal funds to bankroll international travel, luxury vehicles and lavish lifestyles, CBS News noted.
“The magnitude cannot be overstated,” Thompson said. “What we see in Minnesota is not a handful of bad actors committing crimes. It’s staggering, industrial-scale fraud.”
Meanwhile, Centers for Medicare & Medicaid Services Administrator Mehmet Oz warned Minnesota Gov. Tim Walz on Friday that the state risks losing federal Medicaid funding unless it restores what he called the program’s “integrity.”
In a post on X, Oz claimed more than $1 billion had been stolen through a massive Medicaid fraud scheme carried out by “bad actors” within Minnesota’s Somali community. He then alleged that some of the funds “may have even made its way to the Somalian terrorist group (al-Shabab).”
“Our staff at CMS told me they’ve never seen anything like this in Medicaid — and everyone from Gov. Tim Walz on down needs to be investigated, because they’ve been asleep at the wheel,” Oz said, adding these measures that needed to be implemented within the next 60 days:
- Send weekly updates on anti-fraud efforts to CMS
- Freeze enrollment of high-risk providers for six months
- Verify all current providers as “legitimate” or remove them
- Send CMS a corrective action plan to prevent fraud in the future
“If we’re unsatisfied with the state’s plans or cooperation, we’ll stop paying the federal share of these programs,” Oz noted.
The CMS administrator highlighted two Minnesota Medicaid programs launched in recent years that saw explosive cost growth.
According to Oz, the Housing Stabilization Services program — initially projected to cost $2.6 million a year — paid out more than $100 million in 2024.
He also said the Early Intensive Developmental and Behavioral Intervention program ballooned from $3 million in 2018 to nearly $400 million in 2023.
“These scammers used stolen taxpayer money to buy flashy cars, purchase overseas real estate and offer kickbacks to parents who enrolled their kids at fake autism treatment centers,” Oz said. “Some of it may have even made its way to the Somalian terrorist group al-Shabab. … So why didn’t Walz stop them? That’s simple: because he went all-in on identity politics.”
