Heavily-redacted audit finds Minnesota Medicaid had widespread vulnerabilities

A state-commissioned review of Minnesota’s Medicaid program uncovered sweeping financial vulnerabilities across 14 high-risk service areas, finding systemic weaknesses that allowed questionable billing to go undetected and estimating that clearer policies and stronger pre-payment safeguards could save taxpayers more than $1 billion.

A vulnerability assessment by Optum State Government Solutions analyzed nearly four years of claims data, identifying widespread financial risks and specific weaknesses in 14 high-risk service areas — including housing stabilization and personal care assistance.

While more than a dozen high-risk areas were identified, the actual descriptions of the vulnerabilities found within each program are redacted, along with references to “recurring vulnerabilities” that appeared across nearly all services.

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The high-risk service and program areas identified, in order of priority, are:

1. Housing Stabilization Services (HSS)

2. Peer Recovery Support Services (PRSS)

3. Early Intensive Developmental and Behavioral Intervention (EIDBI)

4. Integrated Community Supports (ICS) (Home and Community Based Service)

5. Non-Emergency Medical Transportation (NEMT)

6. Adult Rehabilitative Mental Health Services (ARMHS)

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7. Personal Care Assistance (PCA) / Community First Services and Supports (CFSS)

8. Adult Day Services (ADS)

9. Recuperative Care (RS)

10. Individualized Home Supports (IHS) (covers services without training, with training, and with family training)

11. Adult Companion Care (ACC)

12. Night Supervision (NS)

13. Assertive Community Treatment (ACT)

14. Intensive Residential Treatment Service (IRTS)

The report also withholds specific “tactical issues” and methods related to how claims are adjudicated and audited.

A notice at the beginning of the document states it contains “trade secret information,” which seemingly covers Optum’s proprietary analytic models and fraud-detection methods.

State Rep. Steve Elkins, DFL-Bloomington, told The Minnesota Star Tribune he was disappointed by the redactions.

“They’re identifying, in the parts that you can read, that there are a combination of technical issues and policy issues,” Elkins told the outlet. “So if a lot of it is policy-related, there’s probably things in state law that need to be corrected.”

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Despite the redactions, the report outlines a roadmap for the Minnesota Department of Human Services (DHS) to recover improper payments and modernize its fraud detection infrastructure. 

While state officials said they are reviewing the findings, some lawmakers, including State Rep. Patti Anderson, R-Dellwood, said the guidance is unclear.

“It’s frustrating that the Walz administration redacted almost the entire report,” Anderson told the Minnesota Star. “It makes you wonder what they’re hiding… We’re all frustrated. Unfortunately, it’s not a surprise.”

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The report comes a month after the Trump administration announced it will start auditing Minnesota Medicaid receipts and defer payments to the 14 high-risk programs.

Centers for Medicare and Medicaid Services (CMS) administrator Mehmet Oz told Minnesota Gov. Tim Walz that CMS will begin reviewing the state’s quarterly Medicaid spending reports and defer funding based on findings of fraud, waste and abuse. 

Optum did not immediately respond to Fox News Digital’s request for comment on the redactions.