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A preliminary analysis of Minnesota’s Medicaid payouts found that direct policy violations may have cost the state more than $52 million in less than four years. But the findings come with big caveats.

The $52 million figure does not imply that fraud occurred, but points to claims where policy wasn’t followed for some reason, including providers filing claims improperly, said Minnesota Medicaid Director John Connolly.

The new analysis of Medicaid payouts was done by Optum, a business unit within UnitedHealth Group. The state began working with Optum to pre-screen new claims and study the state’s past payouts to find vulnerabilities. 

“The prior, kind of tip-based way that we investigated fraud or potential program integrity concerns, it just wasn't up to the task,” Connelly said Friday in a call with reporters.

Connelly said the report will help the state’s Department of Human Services investigate current claims before money is doled out for 14 programs that have a high risk of fraud. 

One of them is a program that provides support services to Minnesota children with autism. The report flagged more than 90 percent of Early Intensive Developmental Behavioral Intervention Claims, and Connelly said they needed to understand why.

“We may need to clarify policies so claims that deserve to be approved are not unnecessarily flagged, and providers may not have the training they need to file claims properly. Other policy or procedural issues may also warrant further investigation with these findings,” he said.

The report also said Minnesota could save upwards of $1 billion if it implemented policy changes for services covered, along with “processing enhancements.” The agency underscored again that the projected figures are “not evidence of fraud, waste or abuse.”

The system’s vulnerabilities and the recommendations for change were redacted from the report. 

“We don't want to share information with bad actors — with fraudsters — that will tip them off to how we're looking at fraud and looking at risk or vulnerability to fraud,” Connolly said. “So the last thing we want to do in this process is to provide information that helps people steal from the Minnesota taxpayer.”

Says he’ll take accountability

With fraud in Minnesota

In December, federal prosecutors announced a 

 tied to alleged widespread fraud in Minnesota’s Medicaid programs. And they suggested that since 2018, fraudsters had received roughly $9 billion through 14 Medicaid programs viewed as high risk for abuse.

Connelly said so far the preliminary analysis doesn’t support the $9 billion in fraud alleged by the U.S. Attorney’s Office. 

“We don't yet have a number, so we don't know that to be true, and numbers that are placed out there at this point are speculative, because investigations are continuing,” he said. 

He added that his office is sending its information to the U.S. Attorney’s Office in Minnesota, but due to the 

Correction (Feb. 9, 2026): A previous version of this story misstated the preliminary report's projection of potential savings from closing Minnesota's Medicaid policy gaps. That figure is $1 billion.

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Harshawn Ratanpal

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The new analysis of Medicaid payouts was done by Optum, a business unit within UnitedHealth Group. The state began working with Optum to pre-screen new claims and study the state’s past payouts to find vulnerabilities. 


The Minnesota Department of Human Services

New report flags MN Medicaid billing issues, including in autism program

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