ST. CLOUD, Minn. (Minnesota Reformer) – The FBI served a search warrant Thursday at Smart Therapy Center, an autism treatment provider, as part of a wide-ranging Medicaid fraud investigation first reported by the Reformer in June.
The FBI presence at Smart Therapy was first reported by Deena Winter on the social media platform X.
A source with knowledge of the investigation said another warrant was served at an autism provider in St. Cloud.
The Reformer reported in September that a former supervisor at Smart Therapy Center made repeated attempts to report what she said were negligence and fraud to state officials. Smart Therapy formed in 2019 and quickly became one of the highest paid autism treatment providers, reimbursed over a half million dollars by the state in 2020. Smart Therapy was paid the ninth most out of 142 providers in 2021, when it was reimbursed $2.1 million. It was paid the third most out of 206 providers in 2022, at $2.8 million, and the seventh most out of 280 providers last year, when it was paid $2.6 million.
The state Department of Human Services, which administers the state’s Medicaid program for low-income people and Minnesotans with disabilities, told the Reformer in July that the agency was investigating 15 autism providers and has already completed other investigations, withheld payments due to credible fraud allegations and forwarded cases to law enforcement “when appropriate.” In September, the Star Tribune reported that DHS investigations expanded to 29 providers of early intervention services.
Details of the investigation are unknown, but sure to become clearer in the coming days, in what’s shaping up to be another instance of state government struggling to stop a wave of fraud that has beset a number of safety net programs in the past decade. The case is also sure to bring condemnation from Republicans, who won a share of power in the Minnesota House in November and say they are focused on rooting out fraud in Minnesota government programs.
Growth of spending on the Minnesota autism program has exploded in recent years. The number of providers — who are supposed to diagnose and treat people with autism spectrum disorder — has increased 700% in the past five years, climbing from 41 providers in 2018 to 328 last year.
The amount paid to providers during that time has increased 3,000%, from about $6 million to nearly $192 million — according to data provided to the Reformer by DHS, which administers Minnesota’s Medicaid health insurance program for low-income people and Minnesotans with disabilities, known here as Medical Assistance.
Earlier this year, DHS Assistant Commissioner Natasha Merz told the Reformer that the growth of the autism program has been “pretty consistent” with other DHS programs, such as housing stabilization services, a new Medical Assistance benefit to help people with disabilities and seniors find and keep housing. (Some autism centers advertise both of those services.)
“I don’t think we are surprised or particularly disturbed by the rate of growth,” Merz said at the time. “We know that having early intervention and access to service is a really, really important part of putting these kiddos on a good trajectory for the rest of their lives.”
She added, “Anytime we’re operating Medicaid programs, we have to ensure we’re good stewards of taxpayer money, and that we have the right level of protections in place against fraud, waste and abuse.”
As the Reformer has previously reported, Attorney General Keith Ellison’s office has prosecuted a bevy of Medicaid fraud cases in recent years, including what it dubbed PIT STOP, named for the providers, interpreters and transportation companies involved in the scheme to defraud Medicaid.
The autism investigation is the work of the feds, even as U.S. Attorney Andy Luger continues the office’s yearslong prosecution of culprits in the so-called Feeding Our Future scandal, the $250 million theft of federal money intended to feed hungry children but instead spent on pricey cars, real estate and jewelry as part of the largest pandemic relief fraud in the country.
Indeed, the cases appear to be linked. As the Reformer first reported, some Minnesota autism centers were also part of the food aid program.
Smart Therapy, where federal agents served a search warrant Thursday, claimed it served over 199,400 meals and snacks in 2020 and 2021 under the sponsorship of Feeding Our Future — the nonprofit at the center of the federal fraud. No one at Smart Therapy was charged in the Feeding Our Future case.
Asked about the autism investigation recently, Gov. Tim Walz seemed to be unaware and asked for clarification.
A reporter noted there’s been concern about fraud in the state’s autism program, and Walz responded: “We always investigate it and those people go to jail.”
Although Walz is wrong insofar as there’s been no arrests, the feds appear to be closing in.
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