A Medicaid fraud investigation emerged Thursday as the FBI served search warrants on autism service providers in Minneapolis and St. Cloud.
Federal investigators have already said they found “substantial evidence” that providers have been submitting fraudulent claims for services not provided, according to state Rep. Lisa Demuth, R-Cold Spring. Demuth is the Republican leader in the House of Reprsentatives.
The investigation is part of a larger Medicaid-related investigation in Minnesota, according to a news release issued by Demuth’s office and an application for a search warrant unsealed by a federal judge on Thursday.
Minnesota Public Radio News said Smart Therapy of Minneapolis received nearly $14 million in Medicaid reimbursements between 2020 and this year. Star Autism Center in St. Cloud received $6 million since opening in 2020.
The number of autism providers in Minnesota has increased by 700% in the past five years, accompanied by a 3,000% increase in funding to those services, including $400 million in 2023 and 2024, Demuth said, citing Thursday’s search warrant application.
The warrant application that led to Thursday morning’s searches also stated that at least 12 people previously charged in the high-profile Feeding Our Future fraud investigation owned, received money from or were associated with autism centers that got state funding for providing services reimbursed by Medicaid, according to Demuth.
Feeding Our Future was a Twin Cities nonprofit implicated in a $250 million scheme to defraud federal child nutrition programs during the pandemic.
Demuth said that she would urge Democratic Gov. Tim Walz to order state agencies to immediately pause payments to anyone or any entity that is suspected or convicted of fraud in other state programs.
In a Thursday interview with MPR News following news of the FBI raids, Walz said he would propose additional measures to crack down on misappropriation of state funding. Lawmakers will begin their 2025 session next month.
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