Bill would expand power of MN attorney general's office to prosecute Medicaid fraud

The Medicaid Fraud Control Unit in the attorney general’s office has been one of the most successful units in the country.

A 2022 audit by the Federal Department of Health and Human Services Office of Inspector General showed that unit had more fraud convictions than other similarly sized Medicaid fraud units.

HF2354 would expand that unit while also expanding the office’s powers to investigate and prosecute Medicaid fraud.

It was approved by the House Human Services Finance and Policy Committee Thursday and referred to the House Public Safety Finance and Policy Committee.

“Medical Assistance fraud steals from hard-working taxpayers across Minnesota,” said Rep. Matt Norris (DFL-Blaine), the bill sponsor. “It also steals money that is meant to provide health care to low-income Minnesotans. That's disgraceful, and we're here today to crack down on this kind of fraud.”

The bill would expand the attorney general’s subpoena powers for potential Medicaid fraud when there is an ongoing law enforcement investigation. It would also increase the penalties for Medical Assistance fraud and appropriate money to match federal funds to expand the department’s Medicaid fraud investigative unit.

“This bill is designed to scrutinize and make sure that we have program integrity on the largest source of funds that the Department of Human Services provides to Minnesota,” Norris said.

The Medicaid Fraud Control Unit has been around 40 years. For the past five years, the unit has spent about $5 million in state funds while recovering $53 million in restitution from fraudsters.

“Our investigators and prosecutors are good at what they do,” said Nicholas Wanka, the unit director.

The proposed appropriation of $390,750 each year would be used to expand the office from 32 to 41 members by adding a prosecutor, seven more investigators, and support staff.

That appropriation would cover 25% of that cost while a federal grant would cover the rest.

“With those people and the additional tools we get, we'll be better able to continue our mission to hold fraudsters and abusers accountable for their crimes,” Wanka said.

Norris agrees. “When you look at what this unit has been able to recover in terms of fines and restitution (and) you combine that with the fact that the federal government will be matching the small state appropriation, I think this is a real winner.”

The bill would establish felony penalties for Medical Assistance fraud of up to 20 years in prison and a $100,000 fine.

Representing the Community Provider Alliance, Musab Khalif generally expressed overall support for the bill but has “critical concerns” about the right to due process.

“We feel it needs to be modified with more precise and unambiguous language. Without having clear and precise language, as the Supreme Court of our state has said, then it's kind of going to be a free for all. Laws are going to subjectively be applied as opposed to objectively applied.”