Trump officials travel to St. Cloud to announce arrests of allegedly fraudulent Medicaid providers

Top Trump administration officials announced the arrests of four Medicaid providers at St. Cloud’s police headquarters Wednesday, alleging they fraudulently billed for services. The announcement came a day after federal and state agents raided childcare centers and early autism therapy centers.

The arrests and press conference landing just a few days before the Nov. 3 elections appeared aimed at drawing more attention to the long-running fraud crisis in the state’s safety net programs that has bedeviled the administration of Democratic-Farmer-Labor Gov. Tim Walz.

Although Republicans have sought to seize on the fraud charges as evidence of the failures of Walz and his fellow Democrats, President Donald Trump has undercut the message repeatedly by pardoning healthcare executives who have been convicted of Medicaid and Medicare fraud schemes.

Former clients of one of the defendants arrested Thursday, Jama Mohamod of American Home Health Care, have told local news outlets, including the Reformer, for over a year that Mohamod and his organization provided shoddy services. Mohamod was billing in a program called Integrated Community Supports, a state-run Medicaid-funded disability service intended to give people support to live more independently in apartments instead of institutions.

According to multiple former clients, Mohamod charged Medicaid hundreds of dollars for services that weren’t provided, created a threatening atmosphere, and — when the state’s human services department began withholding payments from ICS providers for “credible allegations of fraud” last year — effectively evicted his clients from the apartments for which he was supposed to be paying rent.

He also billed Medicaid for services that could not have been provided, due to clients being on vacation or at an out-of-town funeral, according to the indictment, unsealed Thursday.

U.S. Secretary of the Treasury Scott Bessent, FBI Director Kash Patel, Center for Medicaid, Medicare Services Administrator Mehmet Oz and other Trump administration officials provided a laundry list of federal initiatives on fraud in the administration’s “War on Fraud.” The effort has also led to significant funding uncertainty for legitimate Medicaid providers trying to care for Minnesota’s most vulnerable populations.

Oz’s Friday appearance signaled continued conflict between Minnesota and the federal government when it comes to Medicaid, which is the state-federal healthcare program for low-income and disabled people and seniors receiving long-term care. The Trump administration has threatened to cut $2 billion annually in Medicaid funding over program integrity, and has withheld hundreds of millions more.

At times, the officials gave misleading statements about the extent of fraud in Minnesota, claiming, for instance, that Minnesota disenrolling Medicaid providers was a sign of widespread fraud.

In fact, the state’s Department of Human Services, in a rush to respond to a federal deadline to re-screen and re-validate most providers, disenrolled 60% of them in  13 Medicaid services deemed high risk for fraud, waste and abuse.

Several providers reported being disenrolled because the state agency failed to process their revalidation or for bureaucratic paperwork issues, and not for suspicions of fraud.

Still, Oz, in the press conference, cited the mass disenrollment as a “degree of fraud” that “you have to purposely be averting your glance to allow to happen.”

Oz has previously misrepresented the results of the rushed re-screening process, known as revalidation. Minnesota Department of Human Services Temporary Commissioner John Connolly, in an Oct. 2 letter, asked Oz specifically to be more accurate on that front: “Providers may be disenrolled for administrative or enrollment issues that do not establish fraud, waste or abuse. … Minnesota requests that future public communications clearly and accurately distinguish suspected or established fraud, waste or abuse from administrative or funding actions.”

CMS deferred around $153 million of Medicaid claims — i.e., retroactively withdrew payment for services that were already given earlier this year — from providers because they were disenrolled in the administrative revalidation process, without specifying what concerns it had around those providers.

Connolly, in the letter, sought clarification on why those providers would constitute a fraud risk.

While the state agency struggles to get clear responses from the federal administration, service providers for Minnesota’s elderly and disabled people in turn have complained about a lack of clear communication from the state, especially around the mass revalidation process and an abrupt two-week delay in payments over the winter.

Oz did not address the domino effects of the administration’s repeated threats to Minnesota’s Medicaid funding, instead focusing on providers who defrauded Medicaid services such as the shuttered Housing Stabilization Services program.

“This housing stabilization program, which everyone on the stage thinks has merit, was shut down because of fraudsters like Sharmaine Meadows,” he said, referencing a provider convicted of a $3.6 million fraud scheme.

Walz shut the program down last year when evidence emerged that the program was riddled with fraudulent providers.

During the press conference, KARE 11’s Lou Raguse asked about the station’s recent reporting on a lucrative deal secured by CoreCivic, the private prison company, which sold its Appleton, Minn., facility to the federal government for hundreds of millions more than what the company had hoped to get from the state.

“If the administration has declared war on waste and fraud, could you explain the $420 million overpayment for a prison in Appleton, Minnesota when the company offered it to the state of Minnesota for $75 million?”

Bessent: “Yeah, I don’t know anything about that. What we are here to do is to prosecute criminal fraud. And any question like that that deflects away from it, I think is a waste of our time.”