Senator Jordan Rasmusson (R-Fergus Falls) chairs the January 22nd Senate Human Services Committee hearing, focused on addressing waste, fraud and abuse. (Senator Rasmusson’s Office)
St. Paul, MN – On Wednesday, (January 22nd), Senator Jordan Rasmusson (R-Fergus Falls), the Republican chair of the Senate Human Services Committee, led a hearing on program integrity and fraud prevention within the Minnesota Department of Human Services (DHS). The committee focused on understanding ways for the agency to strengthen oversight, ensure taxpayer dollars are spent wisely, and guarantee state services only reach their intended purposes.
“As the Republican Chair of the Senate Human Services Committee, addressing waste, fraud, and abuse within the Minnesota Department of Human Services is my top priority,” Senator Rasmusson said. “Every week, it seems we learn about millions of taxpayer dollars that are wasted on programs intended to help Minnesotans in need. This is theft, plain and simple. As U.S. Attorney Andy Luger noted back in December, ‘Minnesota has a fraud problem,’ and it’s time for us to confront it directly. We must make sure that Minnesota tax dollars are spent wisely, ensuring that state services only reach their intended recipients. It is imperative that we work to restore Minnesotans’ trust in how their tax dollars are utilized.”
The hearing is in response to ongoing waste, fraud and abuse within state programs administered by DHS, including the following cases:
- $40 million in unrecovered Medicaid overpayments.
- $30 million in fraudulent Medicaid payments by Evergreen Recovery for services that were either not provided or overstated.
- $14.1 million in fraudulent Medicaid claims by Kyros/Refocus Recovery, including unqualified claims and missing supervision.
- $10 million in fraud resulting from fraudulent medical transportation and service records.
- $7.3 million in Medicaid fraud charges against a PCA run by a convicted felon, with a partner running the billing services while on work release from a jail sentence.
- An FBI raid on two autism centers in December, with reports indicating over two dozen autism centers under investigation.
The committee first received a presentation from the Office of the Legislative Auditor (OLA) on several recent audits concerning DHS. This includes a 2024 program report from the OLA that revealed issues with DHS’s handling of grants, such as the failure to conduct proper risk assessments or requiring grant reviewers to disclose conflicts of interest. Another recent OLA audit found that DHS failed to recover over $40 million in overpayments, had inaccurate debt records, and could not provide clear data on outstanding balances. Additionally, the Minnesota Board on Aging, a part of DHS Aging and Adult Services division, was also flagged by the OLA in 2023 for issues in managing funds for senior nutrition programs, including missing documentation and inadequate monitoring of expenditures.
The OLA outlined recommendations for immediate action that agencies could take to address these issues in each of these reports. In response, Senator Rasmusson emphasized that more must be done to address systemic problems within DHS. “OLA is doing excellent work. However, it is crucial that our state agencies, including DHS, fully implement their recommendations. We must take immediate action to establish effective measures that protect taxpayer dollars and make certain they are spent responsibly and efficiently,” Senator Rasmusson said.
DHS Commissioner Jodi Harpstead, who will be stepping down next month, provided an update on the agency’s ongoing efforts to prevent and investigate fraud. Harpstead outlined several proposals being considered to tackle waste, fraud and abuse during her presentation. These include improving data sharing between agencies, enabling quicker actions like suspending licenses or withholding payments when fraud is suspected, and making kickbacks illegal. The agency also aims to prevent double billing by providers, enhance fraud detection with tools like AI, and streamline the licensing process for certain programs.
The hearing concluded with a discussion on the provider perspective and community impact of this waste, fraud and abuse. Representatives from the Minnesota Association of County Social Service Administrators shared how human services fraud is affecting local programs, and they stressed the need for greater oversight at the county level. Otter Tail County Attorney Michelle Eldien also spoke about the difficulties in prosecuting fraud cases. County officials offered several anti-fraud solutions for the committee to consider.
“Minnesota is a national outlier when it comes to human services fraud. To address this, we must implement stronger safeguards and ensure the agency fully leverages available tools to prevent waste, fraud and abuse before it happens,” Senator Rasmusson said.
In the coming months, the Senate Human Services Committee will continue to explore additional measures and legislative action to strengthen oversight, improve internal controls and hold those who commit fraud accountable.
Story courtesy of Senator Rasmusson’s Office.
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