As the Minnesota Legislature begins its 2026 session, lawmakers are under pressure to address widespread waste, fraud, and abuse in public programs—issues that have made national headlines and turned Minnesota into a frequent target for late-night comedians.
The federal “One Big Beautiful Bill” (OB3), passed by Congress and signed into law, requires Minnesota to implement stronger fraud prevention measures or risk losing billions in federal dollars. This mandate, combined with ongoing scandals, creates an urgent to-do list for the Legislature before adjournment.
Former Assistant U.S. Attorney Joe Thompson has estimated fraud losses in Minnesota at more than $9 billion across 14 high-risk Medicaid-related programs. This staggering figure has energized many Republicans, who argue that the Walz administration is either complicit in the fraud or incompetent in preventing it. Meanwhile, Democrats in the Walz administration, Attorney General Keith Ellison’s office, and the Legislature are seeking ways to distance themselves from the scandals.
Beneath the headlines, however, lie common-sense reforms that would bring Minnesota into federal compliance while recovering improper payments now being wasted.
More than two dozen bills aimed at preventing fraud and holding perpetrators accountable are under consideration. The most urgent focus on stopping payments for services not rendered or to individuals who are ineligible.
Sen. Steve Drazkowski, in his final session after 19 years in the Minnesota Legislature, has proposed two key anti-fraud measures. For more than a decade, Drazkowski has championed legislation to curb fraud in public programs.
He is carrying the “I’m Not a Robot” bill. “What ‘I’m Not a Robot’ says is simple,” Drazkowski explains. “Before we hand taxpayer money to big MCOs (managed care organizations) to care for Minnesotans, they should verify that the enrollee is alive, lives in the state, and wants to remain on Medicaid.” He added, “That’s not too much to ask.”
The measure passed a House committee last year but was excluded from the final Department of Human Services bill. It could save approximately $300 million, which could bolster the state’s bottom line or support counties in conducting eligibility checks.
The Center of the American Experiment has published data showing that roughly one in five dollars spent on Minnesota Medicaid goes to people who live out of state, are already covered elsewhere, or are deceased.
Drazkowski is also drafting a bill to require state-issued photo ID for public programs such as Medicaid and cash assistance. “Minnesota has a huge problem with verification,” he said. “Improper payments occur here more than almost anywhere else in the country. It’s time we give counties the tools they need to verify eligibility—the cost of inaction is bankrupting the system.” Drazkowski is the only legislator proposing a new funding stream to overburdened county workers who will be asked to do more to stop fraud.
Several states have adopted stricter, yet federally compliant, measures to address similar issues:
- Texas and Florida: Require real-time electronic residency checks via state DMV databases and mandate supporting proofs (e.g., utility bills) for applicants when self-attestation raises red flags. They have integrated the PARIS (Public Assistance Reporting Information System) with automated disenrollment for unresolved multi-state matches.
- Arizona: Incorporates third-party data analysis using integrity contractors to stop payment to contracts with abnormal billing.
- Federal Tools: CMS mandates PARIS for multi-state prevention and plans a new real-time system by 2029 to block concurrent enrollments.
Due to inadequate oversight and the Walz administration’s unresponsiveness, CMS Administrator Mehmet Oz is deferring “hundreds of millions” in payments and could withhold as much as $2 billion because of the state’s failure to address fraud effectively.
Legislators must act swiftly to comply with federal law, preserve these critical funds for Medicaid, and redirect money currently going to fraudsters back to legitimate uses like county eligibility checks to prevent fraud upstream.