Feds raid Minnesota businesses, homes in coordinated effort to confront the state's massive Medicare ‘fraud problem'

Yahoo

a day ago

Minnesota's Housing Stabilization Services (HSS) operates under Medicaid to provide vital housing assistance for seniors and individuals with disabilities. While the program serves an essential need, it remains vulnerable to exploitation by certain providers.
According to a recent KARE 11 investigation, authorities have conducted searches at eight Minnesota locations linked to HSS as part of an investigation into what officials describe as a "massive scheme" to defraud the program.
A 93-page affidavit reveals that multiple HSS companies fraudulently billed Medicaid for millions of dollars in services that recipients claim they never received. Measures are now being implemented to prevent such fraudulent activities in the future.
Don't miss
Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast)
Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it
A major scheme, unveiled
As KARE reports, Minnesota was the first state to provide Medicaid coverage for HSS services in 2020. The state estimated the cost of the program at $2.6 million per year.
By 2024, Medicaid spending on HSS reached more than $104 million, per KARE's analysis. And a big part of that stemmed from fraudulent charges.
'Minnesota has a fraud problem – and not a small one,' Acting U.S. Attorney Joseph H. Thompson told KARE. 'For too long, organized fraud schemes like this have flourished in plain sight, draining public resources dry… This state needs to confront the scale of its fraud problem."
For example, the inquiry uncovered that 22 HSS providers operating from a single location — the Griggs-Midway Building in St. Paul — collectively received $8 million in Medicaid reimbursements for services they allegedly delivered. These funds ultimately come from taxpayer contributions.
One HSS provider called Brilliant Minds Services, which was located in the Griggs-Midway Building, allegedly defrauded Medicaid by charging $51,000 for services that were never provided to four clients.
A woman identified as Rachel reportedly called Brilliant Minds Services "a total scam," contradicting the company's claims that they had provided her with assistance.
"I never met with them. I never talked to them on the phone," she told KARE. Yet the company billed Medicaid $14,000 in her name between August of 2023 and April of 2024. And this is just one example of many where an HSS company has billed for services it did not provide.
In response to the ongoing investigation, stop-payment orders were issued for Brilliant Minds Services and other companies suspected of similar fraud. Minnesota lawmakers also implemented changes to the HSS program, requiring stricter oversight.
Republican State Rep. Kristin Robbins, chair of the House Fraud Prevention and State Agency Oversight Committee, said in a statement, "Our committee has repeatedly raised concerns about the rapid expansion of benefit programs without adequate oversight. This case highlights the urgent need for stronger vetting of providers, verifying eligibility, and tighter controls on billing."
Read more: Nervous about the stock market in 2025? Find out how you can
Medicaid and Medicare fraud is an ongoing problem
The situation in Minnesota is by no means the only instance of Medicaid or related fraud. Recently, NRP reported that the Justice Department charged a Pakistani national for a $650 million Medicaid fraud scheme in Arizona.
The defendant conspired with more than 40 addiction clinics to bill the state for services that were never rendered.
Meanwhile, the Justice Department reported in late June that 15 people were charged with over $10.6 billion in fraudulent Medicare and Medicaid billing in New York.
According to the National Health Care Anti-Fraud Association, fraudulent payments account for between 3% and 10% of total healthcare expenditure in the United States. This translates to potential annual losses exceeding $300 billion due to healthcare fraud.
The Department of Health and Human Service's Office of Inspector General found that in 2024, there were 817 fraud convictions related to Medicaid, with $1.4 billion in funding recovered.
The U.S. Government Accountability Office (GAO) says that steps are being taken to address healthcare fraud. For one thing, improved fraud prevention measures were implemented for Medicare, resulting in stopped payments that produced almost $2 billion in savings over a five-year period.
The Centers for Medicare & Medicaid Services also worked with states and audit professionals to increase oversight for Medicaid providers, resulting in 893 investigations between 2019 and 2021.
The GAO says there's more than can be done to prevent Medicaid and Medicare fraud, including:
Relying on state auditors for further Medicaid oversight
Assessing the quality of telehealth services for Medicare enrollees
Reviewing prepayment claims for Medicare
Expanding Medicaid and Medicare provider screenings
It's also important for individuals to know what Medicaid and Medicare fraud look like. It can include:
Billing for services never rendered
Billing for more expensive services than what were provided
Duplicate billing
Individuals enrolled in Medicaid or Medicare should carefully scrutinize their medical bills and benefit explanations to verify accuracy. Any suspicious charges or discrepancies should be immediately questioned and reported. This vigilance not only protects patients from unnecessary personal expenses but also safeguards taxpayer funds from fraudulent billing practices.
Individuals who discover instances of Medicaid or Medicare fraud can submit reports through the official HHS Office of Inspector General website.
What to read next
Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now
Here are 5 simple ways to grow rich with real estate if you don't want to play landlord. And you can even start with as little as $10
Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead
Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you?
Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.