Justice Department Charges 15 in Minnesota Medicaid Fraud Case

The U.S. Department of Justice said Thursday it arrested and indicted 15 people in Minnesota over alleged Medicaid fraud schemes totaling $90 million.

Health Secretary Robert F. Kennedy Jr.

appeared in Minneapolis with Centers for Medicare and Medicaid Services Administrator Mehmet Oz and Assistant Attorney General Colin McDonald to announce the charges. Officials said the alleged schemes diverted money intended for housing people who are homeless, services for children with autism, and support for independent living for people with disabilities.

Officials described the case as the largest autism-related fraud bust in U.S. history. McDonald said two of the defendants are accused of paying kickbacks to parents to bring children to autism centers, where diagnoses were made regardless of medical necessity. Officials said the centers then billed Medicaid for services that were not provided.

McDonald also cited a case involving a patient who was supposed to receive around-the-clock care but did not and was later found dead.

The arrests have renewed scrutiny of Minnesota’s oversight of federal health funds. Oz said the state had not done enough to prevent fraud, pointing to what officials described as weak controls that allowed improper billing and alleged kickbacks.

Minnesota’s payments and provider reviews

The announcement follows CMS withholding more than $300 million in Medicaid payments from Minnesota this year because of concerns about potentially fraudulent medical claims. The state has challenged the deferrals in court, arguing they are larger than usual and politically motivated, according to statements described in the source material.

CMS had sought in January to withhold $2 billion in future Medicaid payments to Minnesota under a federal authority officials said had not been used before. That effort was later put on hold after CMS approved Minnesota’s anti-fraud plan in March.

Under the plan, Minnesota agreed to revalidate by May 31 health providers considered at high risk of fraud, including those offering personal care or in-home care. Of 5,600 providers being revalidated, about 40% had not responded or provided an inadequate response as of May 7, Oz said.

Broader enforcement efforts in other states

CMS has also moved to expand its anti-fraud efforts beyond Minnesota. Officials cited a $1.3 billion deferral for California earlier this month tied to allegations of hospice provider fraud, and said the agency has mandated nationwide reporting on the activities of Medicaid fraud control units.

Further developments are expected as Minnesota completes the provider revalidation process and as the criminal cases proceed in federal court.