Congress opens ‘industrial-scale fraud’ probe in Minnesota, warns Walz demands are ‘just the beginning’
EXCLUSIVE: Minnesota is going to be the first state that will be in the crosshairs of a groundbreaking and comprehensive congressional investigation into systemic social services fraud, waste and abuse, House Energy & Commerce Committee Chairman Brent Guthrie told Fox News Digital.
Guthrie’s panel is demanding audits, provider records, fraud referrals and internal communications dating back several years, signaling a deep dive into whether state officials ignored warnings or allowed fraud to flourish – while working with a major HHS sub-agency to help look into misuse of taxpayer dollars at a wide scale.
"The extensive fraud schemes being perpetrated in Minnesota have wreaked havoc on government-funded health programs," the committee told Fox News Digital via a joint statement from Guthrie and Reps. John Joyce of Pennsylvania and Morgan Griffith of Virginia, both Republicans.
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"We have an obligation to ensure finite taxpayer dollars are being used responsibly, and that the most vulnerable Americans are not being exploited to the benefit of fraudsters and foreign actors," Guthrie, Joyce and Griffith added.
"This letter is the next step in the committee’s work to root out fraud and restore program integrity in our federal health programs nationwide."
A source familiar with the investigation said Minnesota is likely only the beginning of federal intervention into what the committee dubbed "industrial-scale" fraud within, particularly, state-administered Medicaid programs.
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"Minnesota is just the beginning," the source said.
Staff on Guthrie’s committee were also party to recent briefings with the Centers for Medicare and Medicaid Services (CMS) and the Justice Department.
In its letter to Minnesota Gov. Tim Walz and Minnesota Human Services Temporary Commissioner Shireen Gandhi, the committee said the Land of 10,000 Lakes is also under investigation by CMS, led by Administrator Mehmet Oz, on a number of fronts.
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As Oz’s office conducts its own review, Guthrie is demanding Walz turn over extensive records and written answers on the current integrity of federally funded programs, including steps being taken to stop millions in fraudulent payments flowing out of Minnesota.
By the end of the month, Walz will also be expected to explain what measures have been put in place since 2019 to detect fraud, waste and abuse and what "enhancements" have been made over the past year, as the scandal came to the fore.
The committee also demanded to know what types of audits Medicaid-related programs are undergoing, the process for making criminal referrals for suspected fraud, what Gandhi’s agency is doing to sanction or disenroll fraudulent providers and how the state vets Medicaid Service Providers for compliance with federal law.
"Is DHS [the Minnesota Department of Human Services] revalidating all Medicaid providers amid recent state and federal indictments and prosecutions of fraud? If so, please provide details and any relevant documentation regarding this process and the status of those efforts? Does DHS collect data on Medicaid programs with abnormal or statistically significant increases in provider enrollment or claims over time, including programs which greatly exceed their estimated cost upon enactment?"
By the end of the month, the committee is seeking to compel Walz to also turn over all audits conducted that relate to 14 social services programs that the state previously deemed to be prone to "high-risk provider types" – or as some critics would say, ripe for use by fraudulent medical-service providers.
Some of the programs identified include adult companion services, mental health and rehab services, "community-first" services, night supervision services and recuperative care.
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Guthrie, Joyce and Griffith are also seeking all communications between Walz, his staff and state Medicaid Commissioner John Connolly.
"The swath of criminal schemes coming to light in Minnesota include over-billing, false records, identity theft, and phantom claims in Medicaid social service and health programs for the elderly and disabled, people struggling with addiction, and homelessness," Guthrie wrote to Walz.
The committee also claimed that whistleblowers were "willfully ignored" or had their concerns "suppressed" by the Walz administration, while those who tried to report fraud faced retaliation.
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It also identified a handful of programs that had lower barriers to entry, and therefore would be attractive for fraudulent usage.
Guthrie said the 14 high-risk social services programs cost Minnesota nearly $4 billion in state and federal tax dollars.
"Ensuring Medicaid program integrity is critical to preserving access to vital health care services for those that need it most," the letter read.
"Every dollar stolen from the Medicaid program by fraudsters is taken from children, pregnant women, the elderly, and people with disabilities."
Fox News Digital reached out to Walz for comment.