Medicaid Alarm: 90% Claims Flagged

Minnesota let hundreds of autism therapy businesses bill taxpayers for years, and now only six out of 500-plus centers have even bothered to apply for the state license that’s supposed to bring order before a May 31 deadline.

Story Snapshot

State lawmakers say Minnesota’s autism-services program grew fast while basic oversight lagged, leaving Medicaid dollars exposed to abuse.
A state-commissioned Optum review flagged about 90% of sampled claims as problematic, but state officials say “flagged” does not automatically mean proven fraud.
With licensing required by May 31, the tiny number of applications raises the risk of abrupt disruptions for families who rely on legitimate therapy providers.
The Trump administration’s CMS moved to withhold federal Medicaid funds over compliance concerns, escalating pressure on state leadership to clean up programs quickly.

Licensing Deadline Exposes Years of Weak Guardrails

Minnesota legislators pressed state officials after learning that only six autism centers had applied for required licensure, despite more than 500 operating without a license. The new licensing deadline of May 31 is meant to separate legitimate providers from fly-by-night operations, but the low compliance rate suggests the system expanded without enforceable standards. When medical services are funded by taxpayers, basic verification—who’s operating, where, and under what credentials—cannot be optional.

Oversight concerns intensified after a state-commissioned report by Optum flagged roughly 90% of reviewed claims as “problematic,” citing issues that included missing or unverifiable provider information. State DHS leaders cautioned lawmakers that data flags are not the same as adjudicated fraud and said the analytics require refinement. That distinction matters, but so does the bigger picture: a program that cannot reliably validate providers invites waste and abuse, and families pay the price.

Medicaid Autism Providers Multiplied as Verification Fell Behind

Reporting presented to lawmakers showed autism service providers surged from 41 to 328 between 2018 and 2023, a scale-up that should have triggered tighter controls. Instead, the state allowed billing to continue while licensure requirements arrived late in the expansion cycle. Minnesota’s fraud committee members argued that autism therapy is a medical service and should be treated like one, with consistent standards and clear accountability for those handling public funds.

Federal law enforcement activity added urgency. Prosecutors in Minnesota announced the first defendant charged in an autism-fraud scheme described as involving kickbacks, indicating investigators see more than paperwork errors in at least some cases. At the same time, state officials acknowledged broader vulnerabilities and described steps such as unannounced site visits and pauses on admissions in certain high-risk programs. Those actions may help, but they also underscore how reactive the system has been.

Trump-Era CMS Withholding Raises Stakes for State Leadership

Under President Trump’s administration, CMS increased pressure on Minnesota by moving to withhold Medicaid money over misuse and compliance concerns, according to policy and legal reporting. Minnesota appealed and submitted a revised plan, but the conflict highlights a core conservative concern: federal dollars are not “free money,” and states that can’t demonstrate proper stewardship should expect consequences. Strong enforcement also protects honest providers from being undercut by scammers.

Families Risk Becoming Collateral Damage if Cleanup Is Not Targeted

Parents and advocates warned lawmakers that aggressive crackdowns can inadvertently cut off care for children and adults who legitimately need services. That risk is real when licensing arrives abruptly after years of lax enforcement: good actors may face paperwork backlogs while bad actors disappear. The cleanest solution is focused enforcement—verify providers, publish clear requirements, and remove fraud quickly—while building a stable pathway for qualified clinics to stay open and serve families.

Wow. Only 6 of 500!??? That's insane. Where was the oversight? They never thought they would lose or be held accountable. This must stop now!

Minnesota Fraud Investigation: Only Six of 500 Autism Centers Applied for License https://t.co/tvmFtLmbNA #gatewaypundit via…

— For 10 Sake (@for10sake) February 27, 2026

For conservatives watching Minnesota’s pattern of large-scale program abuse, the autism-services mess reads like a warning label on big-government management: when bureaucracy grows faster than oversight, taxpayers get billed and vulnerable people get exploited. The available reporting does not prove that every flagged claim is fraud, and DHS is right to distinguish allegations from findings. But the licensing numbers alone show a system that tolerated too little verification for too long.