FBI Raids Minnesota Autism Centers in Medicaid Fraud Probe: Is the State’s Medicaid System Broken?
In a shocking development on Thursday, the FBI raided two Minnesota autism treatment providers Smart Therapy Center in Minneapolis and Star Autism in St. Cloud, as part of a growing Medicaid fraud investigation. This comes almost immediately following a story in June, that raised some tough questions about the integrity of Minnesota's Medicaid system. But don’t be fooled by the headlines—what’s happening here is just the tip of the iceberg.
Let’s break this down. Over the past few years, Minnesota’s autism treatment program has exploded, with the number of providers skyrocketing by 700% since 2018. However, as the number of providers has surged, so has the cost. The state now spends nearly $192 million annually on autism services, up from just $6 million five years ago. Sounds like progress, right? Well, not if the money is being funneled to fraudsters taking advantage of the system.
According to FBI investigators, Smart Therapy Center billed Medicaid for over $850,000 for autism services provided to a single client over just three years—and got paid more than $438,000 for it. But the kicker? The employees providing these services were reportedly 18 and 19-year-old relatives of the owners with little to no experience or training in autism treatment. And to make matters worse, many of the children allegedly receiving treatment didn’t even seem to have autism in the first place.
Star Autism isn’t off the hook either. The warrant claims the center billed for services provided by medical professionals who weren’t even on staff—or were paid next to nothing for their time. And the icing on the cake? Both providers reportedly billed Medicaid while the staff members in question were out of the country.
Minnesota’s autism program has been growing at a breakneck pace, with more and more providers jumping on board to take a cut of the Medicaid pie. The number of autism treatment providers has increased by 700%, and the costs have followed suit. But here’s the problem: when you throw so much money into a system that’s expanding this quickly, oversight often falls through the cracks.
The state Department of Human Services (DHS) is scrambling to catch up, investigating 15 providers and suspending payments to some. But let’s be honest: the speed of this growth has created a perfect storm for fraud. It’s like trying to catch a speeding car on a bike—by the time the state catches up, the damage is already done.
This investigation is just one example of a broader issue that’s been plaguing Minnesota’s Medicaid system for years. From the Feeding Our Future scandal which saw $250 million in pandemic relief funds stolen, to rampant fraud in other sectors, the state’s safety net programs are under siege. And while state leaders like Governor Tim Walz and DHS Commissioner Jodi Harpstead insist they’re cracking down, the reality is that the system is a mess, and taxpayers are left holding the bag.
Governor Walz, for his part, reacted angrily to the raids, calling the alleged fraud “crimes against children.” And while it’s hard to argue with that sentiment, it’s also clear that the state’s oversight of these programs has been inadequate, at best. Walz and the DFL have spent years expanding government programs with little regard for the potential for fraud or abuse—and now Minnesotans are paying the price.
This latest FBI raid is a wake-up call for Minnesota. It’s time for a real conversation about the future of the state’s Medicaid system and whether we can afford to keep expanding programs without making sure they’re properly managed. The fraud in Minnesota’s autism treatment sector is just the latest in a long line of government missteps, and unless we demand better oversight and accountability, it won’t be the last.
Governor Walz and state leaders may want to point to these investigations as proof of their commitment to rooting out fraud, but let’s not forget that these problems were allowed to fester under their watch. It’s time for Minnesota to stop expanding and start fixing. Because if we don’t, the next fraud scandal will be just around the corner—and it’ll be even bigger than the last one.
