Minnesota House panel discusses transportation services for Medicaid patients, a program at risk for fraud
Thousands of Minnesotans enrolled in Medicaid take a total of millions of trips to their medical appointments each year through nonemergency medical transportation services, a federally required, taxpayer-funded program that's among more than a dozen others Minnesota determined to be at "high risk" for fraud.
On Monday, Department of Human Services officials testified to the Minnesota House fraud prevention panel about its vulnerabilities and steps the agency has taken to fight fraud.
There are roughly 2,000 NEMT providers that served 250,000 Minnesotans in 2025 at a cost of $127 million.
Since January, there has been a moratorium on enrollment of new providers in Twin Cities metro counties, and DHS will visit each company offering these services unannounced from now through May, according to James Clark, the inspector general for the agency.
Among the red flags Clark noted for fraud in this program: Billing for a trip when there is no corresponding medical appointment, excess mileage billed and kickbacks for services.
The Minnesota Attorney General's Office said fraudsters used some of these tactics in a scheme known as the "Pit Stop-66" case that state prosecutors investigated and charged two years ago.
"The situation that I'm seeing with transportation is there is just no easy way to verify that the trip was actually provided and that there was a corresponding medical appointment," Clark told lawmakers.
The department acknowledged data in a separate presentation Monday that showed a 64% drop in the number of trips from last January to December, but noted providers have up to a year to bill for services, so it is hard to say definitively yet that there's been such a steep decline.
Lawmakers were skeptical.
"We're talking about beyond 300,000, close to 400,000 rides not yet billed for in 2025. That's what we're supposed to believe? The absurdity — it's an insult to Minnesota's collective intelligence to accept that premise. And I for one am not going to submit to it," said Rep. Walter Hudson, R-Albertville.
Rep. Patti Anderson, who represents parts of Hugo and Forest Lake, said the numbers suggest that the state is "scaring off the fraudsters" now that discussions about prevention are more in focus at the Capitol.
Monday's meeting came hours before a Minnesota Senate panel advanced a measure to end the housing stabilization services program, which prosecutors described as a "massive" fraud scheme that also lured people outside of Minnesota to cash in.
Most of the NEMT claims — 80% — are reimbursed by managed care organizations, which DHS contracts with to provide services for Minnesotans on state health plans.
Increased oversight by those MCOs and electronic verification of rides are two solutions, Clark said. Both are among a slate of proposals from the Legislature this session to crack down on fraud and implement prevention strategies
"There's no magic bullet solution to these problems, but there are things that will help," Clark said.
Hudson believes there is an "incentive problem" in the current structure that outsources services to private entities.
"When I order an Uber ride, I'm not going to make a deal with the driver to go further away or charge for further away than I need to go, because who has to pay that bill? I do," he said. "The incentive for me is to get the best service at the lowest cost and the incentive for the driver is to provide the highest quality service. Those incentives have disappeared from this process."
Rep. Emma Greenman, DFL-Minneapolis, who has long been a critic of how the state administers Medicaid services and repeatedly voiced those concerns in the fraud prevention committee, agreed.
"It seems to me we need to get better at thinking about how publicly required services can be publicly provided and we should not add all of these private incentive structures in," she said.