House passes bill to expand Medicaid fraud investigation unit

The House passed a bill early Sunday morning to increase staffing for the Office of the Attorney General’s Medicaid fraud investigation unit, stiffen penalties for Medicaid fraud and expend the state’s definition of fraud.  

Sponsored by Rep. Matt Norris (DFL-Blaine), the House amended and passed HF2354 118-16. It now awaits action by the Senate.  

The bill would appropriate $1.23 million annually from the General Fund for fiscal years 2027-2029. Funding would primarily go toward hiring 18 new Medicaid fraud investigation unit positions: 11 investigators, three attorneys and four support staff.  

[MORE: Legislation to expand Medicaid fraud investigation unit heads to House Floor]

Norris highlighted that this funding comes with a federal match of about $3 for every $1 spent by the state. “I call it the buy one fraud fighter, get three free plan,” Norris said.  

Rep. Joe Schomacker (R–Luverne), who co-chairs the House Human Services Finance and Policy Committee, encouraged support. “This is a bill we’ve spent a lot of time on to try to get this in a form that’s workable and suitable.”  

[MORE: Committee rejects sustained funding hike for Medicaid fraud investigation unit] 

The bill would also expand the definition of Medicaid fraud. Current state law defines Medicaid fraud as presenting a false claim for reimbursement with intent to defraud. The bill would expand this definition to include things like lying with the intent of defrauding while enrolling as a false provider, falsifying records about delivery of services or destroying records if they are requested by a state agency. 

[MORE: Bill aims to expand attorney general’s power to prosecute Medicaid fraud] 

The bill also includes previsions to “equalize” penalties for fraud. 

Because of a decades-old law, the penalty is the same regardless of whether someone defrauds Medicaid of $36,000 or $36 million, Attorney General Keith Ellison previously told a House committee. To address this, the bill would create new penalties for Medicaid fraud over $100,000 and over $1 million.