Fraud Committee Update
I get many requests for updates on the work of the House Fraud Prevention & State Agency Oversight Committee that I Chair, so I thought I’d devote some time to that this week.
As you may recall, the Committee meets every Monday from 8:15-10:00 a.m. and it is always live-streamed House Public Information Services. If you want to tune in or watch past hearings, you can find them here.
Here’s a quick recap of the topics we have covered so far:
Week 1: Office of the Legislative Auditor provided an overview of her findings on problems & progress with state grants management practices.
Week 2: Office of Grants Management presented their work to provide training for grants managers across state government and provide policies, templates, and best practice standards for all state agencies.
Week 3: Acting Commissioner of DHS, Shireen Gandhi, and her team came to address fraud in the Child Care Assistance Program (CCAP), which has had numerous cases of fraud since at least 2015.
Week 4: Bill Glahn, a fellow at the Center of the American Experiment, came to discuss his research developing the “Scandal Tracker” which has documented $610 million in known fraud in state government since 2019.
Week 5: Acting DHS Commissioner Shireen Gandhi and Deputy Commissioner of Behavioral Health, Teresa Steinmetz, and BCA Superintendent Drew Evans came to present on changes that have been made to the Behavioral Health Division in the wake of serious and on-going allegations of fraud regarding autism centers, sober homes, peer-recovery specialists, etc.
Week 6: Next Monday, March 24, we will have several Commissioners join us to present an overview of the Governor’s package of reforms to address fraud, which will be introduced next week.
Key Take-Aways: We have learned so much from these hearings and our on-going meetings with whistleblowers from around the state. While in many ways it feels like we are just beginning to understand the scope of the problem, key patterns are beginning to emerge and we are learning about specific gaps in statute that can be addressed.
First and most importantly, we are seeing many examples of how criminals prey on vulnerable Minnesotans. They sign vulnerable people up for services they either don’t provide or provide at a substandard level. Then they over-bill, or double- or triple-bill, Medicaid and/or state and county grants and layer in other services that they may or may not provide, such as transportation, interpretation, housing, food, etc.
Second, state agencies often don’t follow best practices because they are not “required” in state law. For example, an agency “may” be able to stop payment if there are signs of credible fraud, but agencies don’t always use that authority because statute doesn’t require it (statute doesn’t say “must”).
Another example is that grants managers are encouraged, but not “required” to take training the state offers in risk management, internal controls, fraud prevention, etc. Another gap is that kickbacks are illegal under federal law, but not state law. While I strongly disagree that a kickback are not a sign of “credible fraud,” agencies are asking for a specific state statutory crime for kick-backs.
To address these and other statutory deficiencies, I’ve been working with the Office of the Legislative Auditor and others to close these gaps and will introduce a bill on this next week. I am also working on a separate bill to create a state crime for kickbacks, which I hope will be ready soon. Other Members of our Committee are also working on bills to address these and other issues. I hope we get several important reforms passed this session.
We will continue to hold hearings, meet with whistleblowers, and pursue legislation to stop fraud and bring the necessary change in culture to ensure our vulnerable citizens receive the intended services and taxpayers’ money is not siphoned off in fraud.
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