Governor Orders Third Party Audit of Medicaid Billing at the Department of Human Services

(KNSI) – The Minnesota Department of Human Services is contracting with a third-party auditor to analyze Medicaid claims within 14 different programs to go through fee-for-service data with a fine tooth comb, looking for any signs of fraud.

Using money appropriated from the 2025 legislative session, the state will pay Optum to flag applications with missing documentation, inconsistencies, or unusually high billing patterns. Governor Tim Walz says it is the only way to repair the programs’ reputations. “We cannot effectively deliver programs and services if they don’t have the backing of the public’s trust. In order to restore that trust we are pumping the brakes on 14 programs that were created to help the most disadvantaged among us, yet have become the target of criminal activity.”

He adds a warning to fraudsters. “If you attempt to defraud our public programs and steal taxpayer dollars out from under the people who need them most – you will be stopped, and you will be held accountable.”

Republicans in the state House of Representatives are pointing to the move as proof that their concerns that Medicaid fraud would total well over a billion dollars will be proven correct. Speaker Lisa Demuth of Cold Spring is demanding a GOP proposal from last legislative session be adopted. “Independent audits are essential to uncovering and stopping fraud in Minnesota, and while it’s encouraging to see another tool being utilized to combat the explosion of fraud on Walz’s watch, we still must pass legislation next session to create a Legislative Office of the Inspector General to deliver real accountability and transparency in state government.”

Representative Kristin Robbins, a 2026 gubernatorial candidate, echoed Demuth’s call. “I look forward to a full public report of the audit results, as well as transparency on how the auditor was selected and how much they are being paid to perform this work.

“It is long past time for an independent audit of DHS, and I hope the Governor will join us in creating an independent Office of Inspector General in the Executive branch, so independent oversight of executive branch agencies becomes routine.”

The audit will be applied to the following programs: Early Intensive Developmental and Behavioral Intervention services for autism, Integrated Community Supports, Nonemergency Medical Transportation, Peer Recovery Services, Adult Rehabilitative Mental Health Services, Adult Day Services, Personal Care Assistance/Community First Services and Supports, Recuperative Care, Individualized Home Supports, Adult Companion Services, Night Supervision, Assertive Community Treatment, Intensive Residential Treatment Services, and Housing Stabilization Services.

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