(Alpha News): Assistant U.S. Attorney Joe Thompson said he thinks a “significant portion” of $18 billion spent on 14 state-run Medicaid programs could be fraudulent. Asked to elaborate on what a “significant portion” meant, Thompson said “half or more.”
Thompson, who has led the federal government’s fraud prosecutions in Minnesota, made those comments at a press conference on Thursday in Minneapolis. At that press event, the federal prosecutor also unveiled new criminal charges in Minnesota’s ongoing fraud saga.
“Minnesotans and taxpayers deserve to know the truth of the fraud. The fraud is not small. It isn’t isolated. The magnitude cannot be overstated. What we see in Minnesota is not a handful of bad actors committing crimes. It’s a staggering, industrial-scale fraud,” said Thompson. “It’s swamping Minnesota and calling into question everything we know about our state.”
For years, the U.S. Attorney’s Office in Minnesota has been prosecuting criminals who have defrauded federally-funded government programs. The most notable example of this is the $250 million Feeding Our Future scheme that has seen dozens of convictions.
However, the Feeding Our Future scheme led federal authorities to begin investigations into other fraud schemes being perpetrated against Minnesota state government programs that are funded by Medicaid.
Earlier this year, the Minnesota Department of Human Services (DHS) shut down a housing assistance program called Housing Stabilization Services (HSS) after DHS determined HSS had been pillaged by fraudsters.
The program, which reimbursed businesses for helping disabled people with housing needs, was shut down in August. Claims paid out by the program had soared from roughly $20 million in 2021 to over $100 million in 2024.
HSS was just one of many state-run programs that is funded with Medicaid dollars. Three months later, DHS designed 14 Medicaid-funded programs, including HSS, as “high-risk.” Gov. Tim Walz also ordered a third-party audit of those programs.
Those 14 programs include the Early Intensive Developmental and Behavioral Intervention (EIDBI) Benefit, Integrated Community Supports (ICS), Adult Day Services, Nonemergency Medical Transportation services, and others.
The U.S. Attorney’s Office has already announced charges related to EIDBI fraud and HSS fraud. Charges in these types of cases typically follow a pattern of a business enrolling in a Medicaid-funded program and submitting fraudulent documents for reimbursement.
Speaking on Thursday, Thompson said those 14 programs have cost more than $18 billion since 2018. Thompson said “a significant portion” of this sum is fraud. Elaborating, he said“I don’t make these generalizations in a hasty way. When I say ‘significant amount,’ I’m talking on the order of half or more. But, we’ll see.”
“When I look at the claims data and the providers, I see more red flags than I see legitimate providers, and overwhelmingly so,” he added.
Asked if he was saying more than half of the $18 billion likely represents fraud, Thompson said, “I’m saying that’s very possible, yes.”
