More than 1 million Minnesotans rely on the state’s Medicaid program, which annually spends upwards of $20 billion across a network of roughly 300,000 providers. This vital program offers medical care, therapy, treatment, housing, and other essential services that help people stay healthy and contribute to Minnesota’s economy.
Shireen Gandhi, the temporary commissioner of the Minnesota Department of Human Services (DHS), emphasized the critical nature of program integrity. “We know that fraud hurts the people who need these services. Program integrity work is a high priority for DHS,” she said.
Since March 2025, James Clark has served as the department’s inspector general, bringing nearly a decade of experience investigating Medicaid fraud from his previous role at the Minnesota Attorney General’s Office. Clark condemned fraudulent activity, calling it “reprehensible,” “illegal,” and “immoral,” but acknowledged that such abuses continue, often without significant repercussions.
A recent report from the Office of the Legislative Auditor (December 2024) highlighted concerning gaps in oversight: the DHS “has not attempted to recover over $40 million in outstanding overpayments to Medical Assistance providers” and even “plans to forgo recovery of outstanding provider debt that may still be recoverable.”
Legislative Efforts to Improve Oversight
The Minnesota House Fraud Prevention and State Agency Oversight Policy Committee met on July 8, 2025, to address these ongoing issues and explore ways to ensure Medicaid benefits reach eligible recipients while cracking down on fraud.
Legislators took several steps in 2025 aimed at safeguarding program integrity, including:
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Prohibiting kickbacks in Medical Assistance and Child Care Assistance programs.
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Banning duplicative billing.
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Granting authority to investigate maltreatment allegations in Early Intensive Developmental and Behavioral Intervention settings.
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Enhancing oversight of clinical requirements to improve the quality of services and outcomes for children and families.
Commissioner Gandhi acknowledged that while the state is actively working to implement these measures, it faces significant challenges from new federal legislation signed by President Donald Trump, colloquially called the “Big Beautiful Bill.” This law could cut federal funding to Minnesota’s Medicaid program by up to $500 million annually, potentially causing 250,000 Minnesotans to lose coverage and increasing administrative costs for counties responsible for eligibility determinations.
“We have to ensure people who are eligible for these services get them,” stressed Representative Emma Greenman (DFL-Minneapolis).
Divided Perspectives on Eligibility and Spending
Inspector General Clark noted that the new federal law does not provide additional funds for combating Medicaid fraud, intensifying concerns about enforcement capacity.
Republican lawmakers advocate for stricter eligibility reviews, highlighting that the federal law will require “able-bodied” Medicaid beneficiaries aged 19 to 64—excluding those with children under 14—to prove they work at least 80 hours per month to maintain health coverage.
“We are spending $3.2 billion annually on ‘able-bodied people’ that could work,” said Representative Marion Rarick (R-Maple Lake).
Representative Isaac Schultz (R-Elmdale Township) pointed out that Minnesota’s Medicaid spending exceeds that of larger neighboring states by $7 billion annually. “We seek to make sure we’re building a culture of work and so that we aren’t having the same programs and program issues that we’ve seen here in Minnesota with huge problems,” Schultz said. Quoting the governor, Schultz added, “I think it’s probably a culture of generosity. I think it’s a culture of being a little bit too trusting.”
Related: Exposé On DHS Farce: How Minnesota DHS Is Shielding Internal Fraudeers — A Sixteen-Year Cover-Up
Moving Forward
The Fraud Prevention and Recovery Committee continues to examine current Medicaid eligibility practices and fund allocations to strengthen program integrity. As lawmakers seek to balance protecting vulnerable populations with eliminating waste and abuse, Minnesota faces the challenge of navigating federal funding changes while ensuring the Medicaid program remains sustainable and accountable.
Source:
Minnesota House of Representatives. (2025, July 8). Fraud committee looks at Medicaid eligibility, future funds. Session Daily. https://www.house.mn.gov/sessiondaily/Story/18846
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