Minnesota fraud allegations: Department of Human Services halt payments to another program

How MN's legislative auditor plans to stop fraud

FOX 9's Mike Manzoni sat down with Minnesota's legislative auditor about how the state plans on stopping fraud.

ST. PAUL, Minn. (FOX 9) - Payments from Minnesota's Department of Human Services (DHS) to Integrated Community Supports (ICS) providers have been halted after the Office of Inspector General reported "credible allegations of fraud," according to state officials. 

Minnesota Medicaid fraud

What they're saying:

Temporary DHS Commissioner Shireen Gandi shared a message with Minnesota lawmakers detailing what action DHS took regarding the fraud allegations. 

Part of that message said the following:

"As a part of this work, between September 4 and September 23, DHS suspended payments to 11 ICS providers due to credible allegations of fraud uncovered by the DHS Office of Inspector General. The fraud allegations uncovered primarily concern ICS providers billing DHS for services that were not provided. The payment withholds for these 11 ICS providers extend to all affiliated services, resulting in suspended payments to an additional 17 providers."

ICS is funded through Medicaid to provide housing services for clients with disabilities. Those clients typically fall into the gap between independent living and assisted living, with ICS allowing them to utilize residential, provider-controlled apartment settings. 

DHS officials say they are using data analytics to pinpoint indications of fraud.

"We will work with counties and providers to minimize the impacts on clients, but the truth is that these providers are already failing the clients they claim to serve," said Temporary DHS Commissioner Shireen Gandi.

Widespread fraud in Minnesota state programs 

Dig deeper:

This is the latest development in a string of fraudulent incidents in Minnesota that have cost taxpayers hundreds of millions of dollars. 

A woman was charged with wire fraud earlier this week in a case related to the state's autism program. Investigators made the discovery while digging into the massive Feeding Our Future fraud case. 

An Edina man recently appeared in federal court after allegedly using his dissolved businesses to claim about $975,000 in COVID-19 relief. 

There are also eight people, so far, facing federal charges for their alleged roles in a massive housing stabilization fraud scheme.

In addition, there's the massive Feeding Our Future scandal that uncovered $250 million in fraud after providers said they were feeding meals to children when they actually were not.

When asked what can be done, Minnesota Legislative Auditor Judy Randall said, "If we just put in place the internal controls that are already required – that alone is the single biggest thing we could do to help – to help stop the fraud that’s been occurring."

"You cannot audit your way out of fraud," she added.