New state audit finds that Minnesota DHS actively ignored fraud

​By Easton Martin | March 19, 2026

A newly released state audit has found that the Minnesota Department of Human Services (DHS) failed for years to investigate Medicaid kickback allegations. The department cited an erroneous belief that it lacked the necessary legal authority.

​The report from the Office of the Legislative Auditor (OLA) was released Tuesday. It concludes that the DHS Office of Inspector General has had the authority to independently pursue kickback cases since the late 1990s. This finding directly contradicts the department’s long-standing claims. DHS officials previously stated they could only investigate kickbacks when they were tied to other forms of fraud. Examples of such fraud include billing abuse or theft.

​The audit specifically focused on the Early Intensive Developmental and Behavioral Intervention (EIDBI) program. This program provides services for children with autism. It has undergone massive growth in recent years. Its budget surged from $3 million in 2018 to nearly $400 million by 2023. The OLA found the department declined to investigate three specific kickback allegations between 2021 and 2023. These cases were not referred to law enforcement. They were also not flagged for further administrative review.

​”We disagree with DHS’s assertion that it did not have the authority to investigate allegations of kickbacks alone,” the report states. “Based on our analysis, DHS has had the authority to investigate allegations of kickbacks in MA since the late 1990s.”

​The investigation also identified a decades-old error in DHS administrative rules. This error may have restricted the agency’s power to suspend payments to providers during active kickback probes. Prosecutors have identified kickbacks as a primary driver of fraud in autism service programs. These schemes often used financial incentives to encourage families to enroll, allowing providers to maximize Medicaid billing through inflated claims.

​The findings have sparked immediate criticism from Republican lawmakers. State Representative Kristin Robbins is the chair of the House Fraud Prevention Committee. She called the lack of oversight “astounding.” also stating that the department has been complicit in allowing fraud to persist.

​The Department of Human Services provided a response letter in the report, agreeing with the recommendation to update its administrative rules. It plans to explicitly include kickbacks in the definition of fraud.