Anderson: House Passes Key Anti-Fraud Bill

ST. PAUL – State Rep. Paul Anderson, R-Starbuck, said Republicans scored a major victory Thursday as the House passed significant anti-fraud legislation on a 127-5 vote.

The bill (S.F. 856) creates an Office of the Inspector General that will operate independently with future law enforcement authority. Anderson said this is an important step toward providing more transparency and accountability in state government to help get a handle on fraud that has cost state taxpayers $9 billion or more by some estimates.

Republicans, Anderson said, have insisted on establishing a truly independent Office of the Inspector General that has enforcement authority to address Minnesota’s rampant fraud problem. Meanwhile, Democrats sought to amend these components out of the proposal soon after the session started in mid-February, grinding progress to a halt for months on end in Minnesota’s tied House.

“Our goal has always been to create an Office of Inspector General that does more than produce reports,” Anderson said. “The state needs an OIG that can take meaningful action to stop fraud without politics getting in the way. As written, this bill provides what is needed to strengthen oversight and accountability, protect taxpayer dollars, and make sure tax dollars reach the people who need them.”

Anderson said the finished product closely resembles legislation which passed the Senate on a 60-7 vote last year before Democrats blocked it from passing the House. The legislation that passed the House on Thursday makes the OIG responsible for investigating state agencies, grant recipients, and contractors. It would have subpoena power and the authority to freeze or stop distribution of funds under court order. Per the bill, the OIG would be housed in the executive branch due to constitutionality concerns, and to permit the office to have law enforcement authority, Anderson said.

Federal officials have estimated that fraud within Minnesota’s social services and Medicaid programs could total $9 billion or more. This figure stems from investigations into 14 different high-risk Medicaid programs, with officials suggesting that half or more of the roughly $18 billion billed since 2018 may be fraudulent.

Upon enactment of this bill, Minnesota would join around 15-20 U.S. states that have a statewide OIG with broad oversight over executive agencies, Anderson said. It is now in the hands of the Senate.