Investigators are examining potential Medicaid fraud among Minnesota autism services, and state lawmakers say they will consider licensing the providers, whose numbers have increased dramatically across the state.

The Minnesota Department of Human Services has 15 active investigations into organizations or individuals providing certain autism services and has closed 10 other cases, the agency told the Star Tribune. The investigations were first reported by the the Reformer, which wrote last month that the FBI is looking into fraud by autism service providers.

Gov. Tim Walz said Wednesday that he's "not aware" of an FBI investigation, but is concerned about the allegations of fraud.

Officials with DHS were not available for an interview Wednesday, but the department issued a statement saying: "Early identification and access to services are life-changing for people with autism — especially children. That's why it's so important to make sure every dollar spent on services is accounted for."

The state created a medical benefit about a decade ago for young people with autism spectrum disorder and related conditions. The number of people receiving the early intensive developmental and behavioral intervention benefit and the providers getting paid for the services has climbed sharply in recent years, as have the dollars flowing to those providers.

The providers offer therapy and services. The benefit program is intended to educate and support families of people with autism, help individuals be more independent and participate in their schools and communities and improve their lives long-term.

There were 328 related providers in the state last year, up from 41 in 2018, according to DHS data. The amount the providers were paid has also spiked during that time, from $6 million to nearly $192 million.

The state has withheld payments to seven autism service provider organizations since 2018, according to DHS. Five of those were withheld for credible fraud allegations. DHS said another payment was denied because the provider failed to allow DHS access to records and one was withheld "to protect the public welfare and in the best interests of Minnesota Health Care Programs."

"DHS took action to withhold payments when there were credible allegations of fraud and forwarded cases for law enforcement investigation or prosecution when appropriate," the DHS statement said. "These investigations follow a national trend of identifying fraud in Medicaid-funded autism services."

Future license requirements?

The hundreds of autism-related service providers do not need a state license to provide the benefit services. But last year lawmakers tasked DHS with reviewing the service and evaluating whether they needed to license the organizations or make other regulatory changes.

"There's a need for service and the demand for service is high. But the question is do we need to put guardrails?" said House Human Services Finance Chairman Mohamud Noor, DFL-Minneapolis. He said they are looking into that question for both autism centers and telehealth services, to ensure "there is proper care for the most vulnerable children in our state."

The state should be licensing autism centers and in-home providers, who offer the same services in different settings, said Rep. Kim Hicks, DFL-Rochester, who has previously worked as the autism policy lead at the Department of Human Services.

"It's really important that our programs be something that works to support kids and families and doesn't cause harm. And so to do that I think we need more oversight and regulation, particularly when we're talking about licensing of centers," she said.

Legislators agreed this year to license behavior analysts who provide certain therapies and it makes sense to next look at licensing autism-based centers, said Senate Human Services Chairman John Hoffman, DFL-Champlin.

"It'll be part of our hearing structure," Hoffman said, if he continues to serve as committee chair. "It's worthy of a conversation. Let's get the autism experts at the table and let's talk about it."

Hoffman said he is not surprised by the growth in the autism program, which he believes is fairly consistent with other new DHS programs. Prior to 2018, Hoffman said, autism support services were lacking in the state.

One in 34 children in Minnesota was identified as being on the autism spectrum, according to 2020 data from the Minnesota-Autism and Developmental Disabilities Monitoring Network. That's higher than the national rate.

A spokeswoman for Walz said their office will "definitely take a look" at whatever licensing requirements lawmakers propose.

Concerns about fraud

The concerns about autism providers misusing federal dollars come as another state agency, the Minnesota Department of Education, has been in the spotlight for failing to safeguard against fraud in the Feeding Our Future case. Seventy people have been charged in what prosecutors have said was a massive scheme to steal from federal food programs.

DHS said it has systems to identify fraud, waste and abuse and acts swiftly when they are suspected. The agency's Office of Inspector General can investigate suspected fraud and stop providers' ability to bill for services, and forward fraud findings to the Attorney General's Office for prosecution.

Asked about other Medicaid program cases, a DHS spokesman said the agency has 548 total open investigations.

Last month, the Attorney General's Office charged five people in two investigations — one related to home care services, another to medical transportation — with defrauding Minnesota's Medicaid programs out of more than $10 million.

The Attorney General's Medicaid Fraud Control Unit has had 261 criminal convictions in cases since October 2018, and nearly $26.5 million in criminal restitution has been ordered as a result, according to data from the Attorney General's Office.

In the case of children receiving autism services, DHS officials said their Disability Services Division evaluates a child's progress with treatment plans to ensure services should continue to be authorized. The agency said it instructs the managed care organizations it works with to follow similar authorization protocols. Its Office of Inspector General also does complaint-based investigations and audits to check compliance with Medical Assistance requirements.

Star Tribune staff writer Ryan Faircloth contributed to this story.