State Agencies Turn to AI, Better Tech to Combat Surging Benefit Fraud

(KNSI) – Minnesota’s government is dealing with ongoing fraud problems, particularly with fake service providers who submit false bills to get government payments, which, according to a company that helps government agencies, is becoming a bigger issue.

The Minnesota Department of Human Services had to shut down a housing program earlier this month and is now working on redesigning it. They stopped payments to dozens of providers because of credible fraud allegations and said they had no other option. There is also the case of NUWAY Alliance, a substance abuse treatment center with past operations in Central Minnesota, settled a Medicaid fraud case for $18.5 million. The investigation, which alleged kickbacks and double-billing, was prompted by a whistleblower. Those cases, on top of hundreds of millions of dollars in Medicaid fraud within autism center programs, numerous issues surrounding COVID-19 related payouts and the infamous $250 million Feeding Our Future fraud case.

Aja Brown works as a strategic impact partner for FORWARD Platform, which helps governments and nonprofits distribute benefits. She says the fraud increase isn’t surprising since many state and local governments still use outdated monitoring systems. Brown explains that modern technology makes it much easier for people to create fake documents.

Her team has seen fraud activity jump by 30% over the past few years while working with agencies across the country to manage aid programs. She suggests using multiple verification checkpoints along with other efficiency improvements.

Legal experts point out that building solid criminal cases in these situations often takes a very long time. Minnesota passed some new prevention measures this year, but lawmakers admit they need to do more.

State officials also announced they’re looking into using artificial intelligence as part of a pilot program. Brown thinks this approach is necessary and says agencies need to fight back with better technology, which is getting cheaper to use.

Brown acknowledges that fraud news frustrates taxpayers, but she emphasizes the importance of being careful not to make things harder for people who legitimately need help. She doesn’t want to create extra obstacles for program recipients.

Brown stresses that more American families need assistance these days, so it’s important to find the best ways to get funds to people who need them while also preventing money from ending up in the wrong hands.

This tension between tighter eligibility rules and access is playing out more at the federal level too. The One Big Beautiful Bill Act includes controversial work requirements for Medicaid. Proponents argue these requirements will help eliminate fraud and waste, but critics say they target the wrong people and create administrative problems.
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MNC Reporter Mike Moen contributed to this story.

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