Case Explained: Bill aims to expand attorney general’s power to prosecute Medicaid fraud – Session Daily – Legal Perspective

Attorney General Keith Ellison is asking legislators to support a bill he says will build out his office’s ability to investigate and prosecute Medicaid fraudsters in the state.

HF2354, as amended, dubbed the Medical Assistance Protection Act, would add 18 staffers to the state’s Office of the Attorney General, expand the state’s definition of Medicaid fraud and increase penalties for those found guilty of stealing money.

The bill, sponsored by Rep. Matt Norris (DFL-Blaine), would allocate an additional $1.23 million in Fiscal Year 2027 to the office for this purpose.

On Thursday, the House Human Services Finance and Policy Committee approved the bill on a split-voice vote and sent it to the House Judiciary Finance and Civil Law Committee. Committee members didn’t directly discuss the bill and instead used the time to question Ellison about his office in general.

The money from the bill would primarily go toward hiring the 18 new positions: 11 investigators, three attorneys and four support staff. About 75% of the office’s funding comes from federal government grants and the other 25% comes from the state, Ellison said, adding that the department “pays for itself” through the criminal restitution and civil recoveries.

He expects the bill would increase prosecution of Medicaid fraud by expanding the state’s definition of the crime and closing some legal loopholes that currently “allow some fraudsters to avoid accountability.”

Currently, state law defines Medicaid fraud as presenting a false claim for reimbursement with intent to defraud. “Such a narrow definition is challenging for prosecutors because it does not capture all of the morally repugnant and criminal conduct that can be a part of Medicaid fraud,” Ellison said. 

The MAP Act 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.

“These things, I believe, are illegal and constitute Medicaid fraud but there are courts who have raised questions,” Ellison said.  

Also in the bill are provisions to “equalize” penalties for fraud.

Because of a decades-old law, the penalty is the same regardless of if someone defrauds Medicaid of $36,000 or $36 million, the attorney general noted. To address this, the bill creates new penalties for Medicaid fraud over $100,000 and over $1 million.

“Right now, Medicaid fraud is attractive to scammers because penalties for stealing from a private entity are higher than penalties for stealing from the government,” Ellison said.