♪ >> Eric: ALLEGATIONS OF FRAUD WITHIN A STATE AGENCY PROGRAM, AND THIS TIME, THE TARGET, THE DEPARTMENT OF HUMAN SERVICES HOUSING STABILIZATION PROGRAM, THE PROGRAM USES MEDICAID MONEY TO HELP PEOPLE WITH DISABILITIES AND OLDER MINNESOTANS IND AND MAINTAIN HOUSING.

PAYMENTS TO 50 PROVIDERS HAVE BEEN HALTED AS THE INVESTIGATION UNFOLDS.

AJ LAGO IS A REPORTER WITH KARE 11, HE AND HIS INVESTIGATIVE TEAM HAVE DONE A TREMENDOUS JOB FOLLOWING THIS.

HARD TO HOUSE PEOPLE, REIMBURSED, THEY GET THE MONEY, THERE ARE NO SERVICES, IS THAT A FAIR SYNOPSIS?

>> THAT ABOUT SUMS IT UP.

I CAN GET UP AND LEAVE NOW.

I THINK YOU COVERED IT.

RIGHT NOW, I THINK, AS OF TODAY, WE'RE UP TO 77 DIFFERENT COMPANIES THAT HAVE BEEN BARRED FROM BILLING MEDICAID RIGHT NOW.

AND THAT'S JUST WITHIN THE LAST FEW WEEKS.

>> Eric: IS THIS A COMMON PROBLEM AROUND THE COUNTRY?

>> I DON'T KNOW THAT IT IS.

AND THAT IS WAS THIS -- AND THAT IS BECAUSE HIS HOUSING STABILIZATION IS A NEW MEDICAID EXPANSION PROGRAM, AND MINNESOTA WAS THE FIRST STATE IN THE COUNTRY TO PIONEER THIS AND IT'S ONLY BEEN AROUND SINCE 2020.

>> Cathy: SINCE IT'S ONLY BEEN AROUND SINCE 2020, HOWEVER, HOW DID THE STATE MISS THIS LATEST FRAUD?

>> BOY, IF WE HAD THE ANSWER TO THAT QUESTION.

>> Cathy: YEAH.

>> THIS WAS ESTIMATED TO COST ABOUT $2.6 MILLION A YEAR WHEN IT AS PASSED IN 2020.

NOT EVEN FOUR YEARS LATER, BY THE END OF 2024, IT'S OVER $104 MILLION.

IF THAT'S NOT SENDING UP RED FLAGS TO SOMEBODY, I DON'T KNOW WHAT WILL.

>> Eric: HOW DOES THE WORD GET AROUND SO QUICKLY TO WOULD-BE FRAUDSTERS THAT THIS IS AVAILABLE?

HOW DOES THAT COMMUNICATION WORK AMONG THOSE?

>> IT'S HARD TO SAY WHAT DIRECT COMMUNICATION IS, BUT YOU CAN CERTAINLY LOOK ON SOCIAL MEDIA AND SEE VIDEOS AND, YOU KNOW, FOLKS TALKING ABOUT, HEY, IT'S REAL EASY TO SET UP ONE OF THESE PROGRAMS.

YOU KNOW, TO START BILLING THIS WAY.

NOBODY'S ADVOCATING FRAUD IN THOSE VIDEOS YOU SEE ON TIKTOK OR ANYTHING.

BUT THE WORD QUICKLY SPREAD THAT THESE PROGRAMS ARE VERY EASY TO SIGN UP FOR.

>> Cathy: WELL, WHAT ABOUT THE CLIENTS, I MEAN, ARE THEY IN LIMBO NOW?

>> SOME CLIENTS PROBABLY ARE, BUT IT'S HARD TO TELL HOW MANY REAL CLIENTS THERE ACTUALLY ARE.

WHAT WE'VE BEEN FINDING WAS VERY OFTEN YOU'D HAVE, SAY, SOMEONE WHO IS FINISHING UP AN ADDICTION TREATMENT CENTER, THEY'VE BEEN LIVING IN A SOBER HOME, THEY'RE GOING O GRADUATE, A LOT OF THE FOLKS WE'VE BEEN TALKING TO HAVE BEEN DOING REALLY WELL, BUT NOW HEY NEED TO GET BACK ON THEIR FEET AND GET THEIR OWN PLACE.

THEY MAY HAVE JUSTICE INVOLVEMENT RECORD, THEY MAY HAVE EVICTIONS, YOU KNOW, IN THEIR PAST RENTAL HISTORY OR UNPAID ELECTRIC BILLS FROM, YOU KNOW, THEIR TIME IN ACTIVE ADDICTION.

AND, SO, IT CAN BE DIFFICULT TO FIND HOUSING AND LANDLORDS THAT WILL WORK WITH THEM.

AND THAT'S WHERE THIS PROGRAM IS SUPPOSED TO STEP IN AND MEET A REAL NEED.

BUT ALL THE FOLKS I'VE BEEN TALKING TO SAY THEY WERE SIGNED UP WITHOUT THEIR KNOWLEDGE OR IF THEY IGNED UP WITH SOMEBODY, THEY NEVER HEARD BACK FROM THEM OR THEY'D CALL AND CALL AND CALL AND NEVER GET A CALL BACK AND THEY'D GET FRUSTRATED AND GO FIND THEIR OWN PLACE EVENTUALLY.

>> Eric: CAN MONEY BE RECOUPED, CLAWED BACK?

>> THEY'RE CERTAINLY GOING TO TRY.

WE KNOW HAD THERE'S A FEDERAL INVESTIGATION THAT IS UNDERWAY, BUT, LIKE WE'VE SEEN WITH EVEN FEEDING OUR FUTURE, YOU KNOW, TELLING OMEBODY THEY HAVE TO PAY BACK THE MONEY DOESN'T NECESSARILY MEAN THEY HAVE THE MONEY STILL IN THEIR POCKET TO PAY IT ACK EVEN IF THEY'RE CONVICTED AND ORDERED TO.

>> Eric: SENTENCING YESTERDAY FOR A KEY FIGURE IN FEEDING OUR FUTURE.

>> YEAH.

>> Eric: WHAT'S THE UPDATE THERE?

HOW MANY HAVE BEEN CONVICTED?

HOW MUCH MORE IS THERE?

>> I BELIEVE THAT WAS JUST THEIR 50th CONVICTION IN FEEDING OUR FUTURE, AND BASED SOLELY ON WHAT I'M SEEING IN MY REPORTING, I WOULDN'T BE SURPRISED IF WE TART SEEING NUMBERS LIKE THAT WITH THIS HOUSING STABILIZATION.

>> Cathy: INTERESTING.

I'M SURE YOU'VE BEEN TALKING TO LAWMAKERS.

YOU HAVE FEEDING OUR FUTURE, THE AUTISM CENTERS, THAT'S ANOTHER LARGE FRAUD THERE, YOU HAVE THE HOUSING STABILIZATION.

WHAT DOES THAT TELL YOU ABOUT THE LACK OF OVERSIGHT HAT VARIOUS STATE AGENCIES HAVE OVER THESE PROGRAMS?

>> THERE DOESN'T SEEM TO BE MUCH OVERSIGHT AT ALL, ESPECIALLY OF THESE MEDICAID EXPANSION PROGRAMS.

THEY'RE NOT LICENSED ENTITIES, YOU DON'T HAVE, YOU KNOW, SOMEBODY FROM DHS GOING IN AND CHECKING ON THEM, MAKING SURE THEY HAVE A REAL FACILITY, THE SAME WAY YOU WOULD WITH, SAY, AN ADDICTION TREATMENT CENTER THAT'S LICENSED.

THERE DOES NOT SEEM TO HAVE BEEN ANY OVERSIGHT.

I DON'T KNOW HOW YOU POSSIBLY COULD CLAIM THERE WAS OVERSIGHT.

>> Cathy: I'M WONDERING, BECAUSE I KNOW YOU'VE BEEN TALKING TO VARIOUS SOURCES, WHAT'S THE REACTION WITHIN DHS?

HAVE THEY SAID ANYTHING ABOUT THIS AT ALL?

AND WHAT'S NEXT FOR THEM?

DO WE KNOW?

>> IT DEPENDS ON WHO YOU TALK TO AT DHS.

NOW, OF COURSE, LEADERSHIP IS SAYING NOW THAT, YOU KNOW, NOT ANOTHER PENNY CAN GO TO FRAUDSTERS AND AD ACTORS.

AND YOU HAVE FOLKS BEHIND THE SCENES THAT ARE, YOU KNOW, DOING BACK FLIPS THAT THIS PROGRAM'S FINALLY BEING SHUT DOWN BECAUSE THEY SAY THEY'VE BEEN SCREAMING TO THE HEAVENS FOR QUITE SOME TIME BEHIND THE SCENES, AND, YOU KNOW, THAT THIS NEEDED TO HAPPEN.

BACK TO YOUR QUESTION ABOUT OVERSIGHT, WHAT I THINK IS HAPPENING, WHAT I'M SEEING IS THAT THERE IS MECHANISMS TO MAKE SURE THAT AN INDIVIDUAL RECIPIENT OF SOME OF THESE MEDICAID DOLLARS CAN'T COMMIT FRAUD.

AND THAT SEEMS TO BE WHERE ALL THE OVERSIGHT'S BEEN, AND EVEN YOU CAN LOOK AT WHAT'S COMING OUT OF WASHINGTON RIGHT NOW WITH TALKS ABOUT MEDICAID AND IT'S CRACKING DOWN ON INDIVIDUAL RECIPIENTS WHO MIGHT COMMIT FRAUD AND TURNING A BLIND EYE TO THESE BUSINESSES AND COMPANIES AND SO-CALLED NONPROFITS THAT ARE JUST PLUNDERING THE SYSTEM.

>> Eric: KARE-11.COM, YOU CAN FIND YOUR ARCHIVED REPORTS?

>> YOU CAN.

WE'VE CALLED OUR INVESTIGATION "ROARVE, INC." AND THAT IS ON COCHLEAR IMPLANT.