GOP lawmakers ask feds to audit state’s Medicaid program
GOP lawmakers ask feds to audit state?s Medicaid program
Republican state lawmakers on Wednesday formally asked a federal watchdog to investigate the state?s ?rampant? Medicaid fraud. The request came a week after the FBI raided homes and businesses as part of a sweeping fraud investigation. FOX 9's Mike Manzoni has the update.
ST. PAUL, Minn. (FOX 9) - Republican state lawmakers on Wednesday formally asked a federal watchdog to investigate Minnesota's "rampant" Medicaid fraud.
The request came a week after the FBI raided homes and businesses as part of a sweeping fraud investigation.
READ MORE: MN Housing Stabilization Services fraud investigation: Feds raid homes, businesses
GOP House lawmakers ask for federal audit amid FBI investigation
The letter:
In a letter to the acting inspector general, several Republican lawmakers in the Minnesota House asked the federal watchdog to conduct an audit of the state’s Medicaid program.
The lawmakers called the fraud "rampant" and said it "has gone unchecked for years."
The investigation:
The FBI raided more than a half-dozen homes and businesses across the metro on July 16as part of a sprawling probe into suspected fraud. According to court documents, providers billed Medicaid for millions of dollars worth of services they never rendered.
Housing Stabilization Services, which was created in 2020, allows Medicaid to cover expenses for finding housing for vulnerable adults, including seniors and those with disabilities or addiction issues. Federal investigators said the program is "extremely vulnerable to fraud."
According to a search warrant, 14 providers collected $22 million over a 16-month period. In all, the program has cost taxpayers $302 million since its inception. During that time frame, it was estimated to cost about $12 million.
What they're saying:
"Taxpayers are fed up. Citizens who need services are fed up," said Republican State Rep. Kristin Robbins, who chairs the fraud prevention committee. "We need to get our federal partners in here to conduct a full audit. We need to hold people accountable – that’s been the missing piece."
Fraud consultant: ‘I warned the state about Medicaid fraud years ago’
The backstory:
A fraud consultant who specializes in healthcare costs said he warned the state about Medicaid fraud nearly a decade ago but was ignored.
In October 2016, Jeff Leston produced a document titled "Fraud Prevention White Paper," which outlined the ways in which the state could stop fraud in its Medicaid program.
But he said states are disincentivized from finding and reporting Medicaid fraud.
"If the folks in St. Paul recover $10 million in Medicaid fraud, the feds say, ‘Well, since we put in 70 cents of every dollar, you’re going to pay us back 70 cents of every dollar,’" explained Leston, founder and CEO of Castlestone Advisors, a healthcare consulting firm. "So, the response to that is to do as little as possible."
Leston said states usually recover only about 40% of what is stolen.