New OLA Report Demonstrates Failure of DHS to Use Full Authority to Protect Taxpayers and Stop Fraud

The Office of the Legislative Auditor (OLA) today released a special review of the Department of Human Services' work investigating Early Intensive Developmental and Behavioral Intervention (EIDBI) Program for allegations of kickbacks.

The report noted several findings, including the failure of the Inspector General at DHS to pursue investigations into allegations of kickback schemes when the complaint was centered solely around kickbacks.

Senator Jordan Rasmusson (Fergus Falls), Republican lead for Human Services, issued the following statement:

“The Department of Human Services knew about potential kickbacks in autism services and chose to ignore this theft from taxpayers. Despite having legal authority to stop kickbacks, DHS knowingly allowed this service to be defrauded. This OLA report provides another example of Minnesota Democrats failing to protect taxpayers and the Minnesotans who rely on these services.”  

Key findings include:

  • Regardless of legislative changes in 2025, MN Statutes has long authorized DHS to impose sanctions for kickbacks.
  • DHS’s administrative rules have – for decades – contained an error in the definition of “fraud” that limits authority.
  • Until fraud is defined in administrative rule or applicable state law includes kickbacks, it is unclear if DHS has the legal authority to suspend payments to a MA provider while investigating credible allegations of kickbacks alone. (p. 2)
  • Three complaints of kickback allegations were closed without investigation because DHS claimed it lacked authority to investigate only kickback allegations. (p. 8).  These cases were not flagged for future investigation or referred to another entity to investigate fraud in MA.

EIDBI Growth:

  • The number of providers more than tripled from 2020 to 2024
  • The number of individuals receiving services more than tripled from 1,400 in 2020 to 5,600 in 2024.
  • The total cost of the EIDBI program has grown from $38.1 million in 2020 to $324.9 million in 2024. (p.4) This represents a 753% increase in costs.

The full review can be read here.