The U.S. Attorney’s office recently announced new fraud charges that reveal the massive scope of fraud through Medicaid waiver billing happening in Minnesota. U.S. Attorney Joe Thompson noted that their ongoing investigation is showing “staggering, industrial-scale” levels of Medicaid fraud, and also coined the term “fraud tourism” to describe those from other states who come to Minnesota where there is “easy money” to be made. This comes after their investigation found two men from Philadelphia creating two companies that submitted $3.5 million in fraudulent claims for nonexistent housing support services in Minnesota.

During his press conference, he also noted that fraud might have siphoned as much as half of the $18 billion paid out through 14 Medicaid programs.

Senator Karin Housley (R-Stillwater) released the following statement in response:

“For years my colleagues and I have been trying to get the democrats and Governor Walz to take this fraud seriously – the red flags have been there and we’ve been ignored. We pushed to have his agency commissioners come before our senate committees so we could properly vet them and ask questions about what they are doing to prevent fraud. The democrats shut us down, confirmed them without any hearings and even changed the law so that going forward any governor could appoint whomever they want without any legislative input.

Republicans led the effort to pass a bill last session that would have created an Office of Inspector General (OIG), which would hold agencies accountable and take a fine tooth comb through their budgets, but despite the bipartisan support it received in the Senate, it was blocked in the House before it could even be voted on. The original plan would have addressed fraud in a meaningful way by allowing the OIG to act independently in its oversight of state programs and agencies. To make matters worse, Governor Walz took the bones of that proposal and removed all the teeth. He signed an executive order that creates a coordinated council with a Director of Program Integrity who will report directly to the Governor’s office – a laughable action.

This is an unacceptable solution. Governor Walz has looked the other way on fraud for too long. Because of his inaction, our most vulnerable citizens are left without access to critical programs they rely on. Our state has become synonymous with ‘fraud’, and I welcome the continued federal investigation, which is taking the fraud situation far more seriously than the Walz Administration ever has. Any amount of fraud is unacceptable, but $9 billion is impermissible. Every Commissioner and Legislator who looked the other way despite the numerous red flags must be held responsible for their role in allowing fraud to thrive in Minnesota.”