The House Energy Committee on Tuesday threatened to withhold Medicaid funding to Minnesota if the state does not meet anti-fraud requirements, as the panel launched an investigation into “unprecedented” abuse it believes is occurring in the federal welfare program.
The development marks the government’s latest effort to probe sweeping multibillion-dollar fraud schemes that have been ongoing in the state since “potentially” 2013, according to the committee. Chairman Brett Guthrie (R-KY) is requesting records from Gov. Tim Walz (D-MN) and the Temporary Commissioner of Minnesota’s Department of Human Services, Shireen Gandhi, to aid the committee’s investigation into fraud. Members have said that the abuse occurred through over-billing, false records, identity theft, and phantom claims in Medicaid social service and health programs for the elderly, disabled, addicted, and homeless.
“The extensive fraud schemes being perpetrated in Minnesota have wreaked havoc on government-funded health programs. We have an obligation to ensure finite taxpayer dollars are being used responsibly, and that the most vulnerable Americans are not being exploited to the benefit of fraudsters and foreign actors,” Guthrie said in a joint statement with Reps. Morgan Griffith (R-VA) and John Joyce (R-PA), who are respectively leading the investigation through the panel’s Subcommittee on Health, and its Oversight and Investigations subcommittee.
The committee sent a letter to Walz and Gandhi, requesting more information about what “program integrity measures” they took to prevent and monitor fraud in Minnesota’s Medicaid system. Lawmakers referenced the Centers for Medicare & Medicaid Services’ findings that Minnesota violated federal oversight regulations, warning that CMS has the authority to withhold all funding until the state takes corrective action.
“If Minnesota fails to comply with federal Medicaid requirements, CMS will begin withholding Medicaid funds from the state until it comes into compliance and implements a corrective action plan to address rampant FWA,” the committee wrote. “Ensuring Medicaid program integrity is critical to preserving access to vital healthcare services for those that need it most. Every dollar stolen from the Medicaid program by fraudsters is taken from children, pregnant women, the elderly, and people with disabilities.”
Federal agencies have already been investigating the state for months, with scrutiny renewed by YouTuber Nick Shirley’s investigations into alleged fraud. In one of his latest videos, Shirley highlighted concerns that fake companies posing as non-emergency medical entities could be the common denominator across most of the Minnesota fraud being investigated. The Minnesota Department of Human Services said that the companies did not receive Medicaid funding, but Shirley said they were used to lend legitimacy to other fraudulent operations scamming the state. He visited the sites of the identified companies — Safari Transportation, Crescent Transportation, Dream Line Transportation, Silver Mountain Healthcare Co., Epimonia Transport LLC, Rayz Transportation, and Advance Mobility — but said none appeared to be operating transportation services. Observers have noted that Shirley sent correspondence to Advance Mobility’s mailing address rather than its California physical location.
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“Essentially, these transportation companies are what hold all the fraud together because you have the daycare centers working with the transportation companies, the adult daycare centers working with the transportation companies, the healthcare companies working with the transportation companies,” Shirley said.
“So it’s just another way to bill and to also make it look like something’s happening here inside of Minnesota. They need to leave a paper trail to make it look like something is happening. Therefore, they use these transportation companies to create that paper trail by saying they are moving people from an adult daycare to a healthcare provider, for example. But they actually never provide the service at the healthcare provider. But that paper trail allows them to continue to bill the state for the money.”
Shirley is set to testify on Wednesday about the Minnesota fraud before the House Judiciary Subcommittee on Crime and Federal Government Surveillance.
