Feds threaten to slash Minnesota Medicaid funds amid ongoing fraud pro

Minnesota is facing threats that the federal government may pull its funding for Minnesota’s Medicaid program until it cleans up its act amid investigations into multiple alleged fraud schemes plaguing the state’s social services system. 

Minnesota is coming under heightened scrutiny as President Donald Trump has labeled Minnesota a “hub of fraudulent money laundering activity,” due to several key fraud schemes targeting the state’s Medicaid program, and other federally funded programs that feed children. More than 80 people have faced charges in the state in connection with these schemes. 

Chris Edwards, the Kilts Family Chair in Fiscal Studies at the libertarian think-tank the Cato Institute, said that federal-state funding programs are ripe grounds for fraudulent activity. 

“Federal aid-to-state programs are especially vulnerable to fraud and scams because the Feds mainly pay for them,” Edwards said in a Tuesday email to Fox News Digital. “The states administer and they care little about waste because the Feds are paying. The states would have more incentive to run efficient programs if they were funded by state taxes. The states must balance their budgets every year, so politicians must make tradeoffs and focus on efficiency.” 

“By contrast, the federal government runs massive deficits, so the politicians don’t care much about waste,” Edwards said. “There’s a double-problem with aid-to-state programs: the states don’t care about waste because it’s federal money, and the Feds don’t care either because they run massive deficits.”

MINNESOTA FRAUD SCHEME UNEARTHS MILLIONS IN LUXURY PROPERTY, CARS: DOJ 

Included in this series of alleged fraud schemes is one stemming from a new program known as the Housing Stability Services Program,…