The federal government has put Minnesota on notice: fix the fraud or lose federal funds.
And a recent filing from the feds is a “bombshell” that could lead to severe consequences for Gov. Tim Walz and his administration, according to attorney Dr. David Feinwachs, who recently joined Liz Collin on her podcast.
He is former general counsel of the Minnesota Hospital Association. He was fired for asking too many questions after four HMOs in Minnesota were making an extraordinary amount of money from the state Medicaid program.
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With the recent action taken by the federal government, he calls what’s happening now to fight fraud in Minnesota “extremely significant.”
“The federal government is going to withhold some of the money that they’re supplying to Minnesota,” Dr. Feinwachs said.
On Wednesday, Jan. 14, that notice became a part of the official government record. It states that “the Minnesota Medicaid agency fails to adequately identify, prevent, and address fraud, waste, and abuse (FWA) in its Medicaid program.”
Dr. Feinwachs explained that the notice allows Gov. Walz to request a hearing. “And if he does … he will need to prove to the federal government’s satisfaction that he’s got a real plan to try to deal with this fraud, which at the moment he most certainly does not.”
‘Total absence of financial safeguards’ — the ‘root cause of all fraud in Minnesota’
“The root cause of all fraud in Minnesota is the absolute total absence of financial safeguards. There just aren’t any there. Zero,” Dr. Feinwachs said.
“What’s interesting is this isn’t by accident,” he added.
Dr. Feinwachs pointed out how the financial safeguards seem to have been eliminated in Minnesota “because there is a larger fraud going on involving the state itself and that fraud involves the state billing the federal government for unnecessary, fictitious insurance reserve.”
“That fraud is in the multiple billions of dollars,” Dr. Feinwachs said.
In talking about some of the details, he explained that, “The way things work in Minnesota is these programs are largely what they call 1115 waivered programs, which means they’ve eliminated the requirement for audits and they’ve eliminated most of the oversight. In terms of HMOs or managed care organizations, the investigation of fraud has been outsourced to them.”
“So if they’re crying about being impacted by fraud, it’s because they’re not investigating it. And they don’t investigate it, because, hypothetically, what if they’re also committing fraud?” Dr. Feinwachs questioned.
Gov. Walz: ‘His actions are actually distractions’
In talking about Gov. Walz and his so-called actions to fight fraud, Dr. Feinwachs said that Walz’s actions “are actually distractions.”
Dr. Feinwachs talked about how measures to fight fraud were not taken during the last legislative session due to the risk of losing federal funding.
“I can only think of one way you lose federal funding for investigating fraud. You find the state itself is involved in the fraud. That would be one way you could lose federal funding,” he said.
Dr. Feinwachs said that in light of these developments, people should be asking tough questions. He wondered himself, “Where’s the outrage? Where are people demanding to know what on earth is going on?”
Liz Collin
Liz Collin is a multi-Emmy-Award-winning investigative reporter, news anchor, and producer who cares about Minnesota. She is the producer of The Fall of Minneapolis and Minnesota v We the People documentary films, and author of the Amazon best-selling book, They’re Lying: The Media, the Left, and The Death of George Floyd. Her work has prompted important state laws. Yet perhaps most of all, Liz has been giving a voice to the truth—and helping others tell their stories—for more than 20 years.
Dr. JC Chaix
Dr. JC Chaix is an editor, educator, and an expert in media studies. He wrote and directed the Alpha News documentary "The Fall of Minneapolis" and "Minnesota v We the People."
