A spike in autism centers across Minnesota led to an FBI investigation into fraud and neglegence

CATHY WURZER: Federal and state investigators are examining a number of Minnesota autism centers for Medicaid fraud. In fact, the number of individuals or agencies the State Department of Human Services is investigating has nearly doubled in the past few months. The Minnesota Reformer recently reported that a former supervisor at a Minneapolis autism therapy provider tried to report negligence and fraud to state officials back in June and got no response.

Dina Winter, formerly of the Minnesota Reformer, reported that most recent story, and her editor, Patrick Cooligan, is here with us to talk about it. Patrick, thank you for taking the time.

PATRICK COOLIGAN: It's good to be here.

CATHY WURZER: Well, the Reformer first started reporting on potential Medicaid fraud in the state autism program in June when the FBI started looking into it. What made the FBI start suspecting fraud?

PATRICK COOLIGAN: I think this investigation grew out of what's become known as the Feeding Our Future scandal, and that is the $250 million misuse of federal money that was intended to go to hungry children during the pandemic and wound up in some people's pockets. And I think with the investigators, we suspect what's happened is that they were doing what we were doing in our newsroom.

We were trying to see, were there are other government programs that the suspects in Feeding Our Future were also engaged in? And if you look, what you'll find is that a number of them also have these autism centers.

CATHY WURZER: And we should step back for a context in a minute and define, what are autism centers?

PATRICK COOLIGAN: Well, these are places where children who have a autism spectrum disorder go for the kind of intensive therapy and educational needs that we now know are really crucial very early and very persistent, so that in order to help the children become independent adults, at some point. There was a lot of advocacy and work that went into kind of coming to that realization and then getting the government support for it.

So that's one of the many reasons why this fraud is so distressing is that autism programming is so crucial to children who need it. And then to see the money misused is particularly distressing.

CATHY WURZER: Yeah, absolutely. And the number of autism centers have grown exponentially since 2018. Why have so many popped up around the state?

PATRICK COOLIGAN: Part of that is just because we didn't have a program. Previously, insurance, both private insurance and also Medicaid, were not covering autism treatment. There was a lot, like I said, a lot of advocacy.

And, thankfully, we came to that realization that we need this. And so some of the growth can be attributed to the fact that it's a new program, and you'd expect that we'd have growth in the centers. But the amount of growth has certainly been startling and does look to be greater than what you would ordinarily see.

We went from 41 providers in 2018 to 328 last year. That's a 700% increase. And the amount of dollars spent has been even greater.

CATHY WURZER: "Exponential" is absolutely the right term for that. My goodness. So what kind of oversight do they currently receive from the state?

PATRICK COOLIGAN: Autism centers are not licensed. And so that's obviously a huge problem, because without licensing, the Department of Human Services, which is nominally tasked with regulating autism centers-- they can't track caseload size or staffing ratios. And so this is a clear blind spot that, I suspect, fraudsters kind of saw.

These are pretty shrewd people. And so they go look for programs that don't have much oversight. The legislature has instructed DHS to study at least whether to begin licensing autism centers and better regulate them. And I suspect this will be a top priority of the legislature no matter who's in control early next year.

CATHY WURZER: Right. And what kind of money are we talking about?

PATRICK COOLIGAN: So the increase has gone from, over that same time period, 2018 to 2023, 6 million to nearly 192 million. So that's a 3,000% increase. And when we got that data back, it was just absolutely startling.

Again, some of it is understandable because we just started the program, and we're now giving access to families so that they can get the help they need. But you just would not expect to see this kind of increase.

CATHY WURZER: Yeah. Your story focuses mostly on Smart Therapy Center in Minneapolis. What do you know about that center?

PATRICK COOLIGAN: Yes, based in Minneapolis. We did hear from a former supervisor there. She had raised concerns about it after having worked there two years. We also know that they were recipients of some of that child nutrition money-- the Feeding Our Future money-- including $465,000 during 2020 and 2021, and a little bit, as well-- $85,000 in 2019.

No, they have not been charged in that case. I want to be clear about that. But that certainly has us wondering how they are associated with Feeding Our Future, because also, they were sponsored in that program by something called Partners in Nutrition, which is the nonprofit enmeshed really deeply in that case.

And so we don't know a whole lot because they declined to comment and because there's not great public records, because, again, DHS doesn't license these centers. But, certainly, the association with Feeding Our Future raised concerns, I think, for investigators.

CATHY WURZER: Yes. Blind spots, indeed. And just for clarification, what did this former supervisor allege? Was she talking funding? Was she talking treatment of children?

PATRICK COOLIGAN: Yeah. She has concerns that the children just aren't learning there, which is, of course, what we expect to happen there. And also, she makes an interesting point about discouraging the families from taking children to other centers where they might get additional assistance. And the reason that's concerning is because it looks like they're trying to keep the family at their center in order to keep the money flowing as opposed to helping the family get the services they need. And I should also note that Smart Therapy did not respond to our request for comment.

CATHY WURZER: And I do want to keep these families within this story. Tell me more about the families who turned to autism centers to support their family members.

PATRICK COOLIGAN: Yeah. This is a increasing service that families need. And, again, that's why this is so distressing is that there are so many families who need these services and who can't get it. There's a shortage of reliable and effective therapy, on the one hand, while on the other hand, we have what looks like a strong possibility of fraud in the program.

There are some moms who are particularly effective in their advocacy. And they helped create the program. And so we certainly hope that the program is using the resources wisely and the help is getting to the children who need it.

CATHY WURZER: Has the Department of Human Services responded to these claims of negligence and fraud?

PATRICK COOLIGAN: So we reported over the summer that there were 15 centers that were being investigated by DHS. They had referred some to potential prosecutions to the attorney general. The Star Tribune recently reported that I think the total was now up to 29.

CATHY WURZER: Yeah.

PATRICK COOLIGAN: So it seems like DHS has become a much more aware of this issue, presumably because the feds and reporters like ours have made them more aware of it. They, of course, will tell you that they're against fraud and have put in place guardrails to prevent it.

But I should note that the woman who worked at Smart Therapy, she says that she had contacted DHS and has not heard anything from DHS. They say they will respond to all tips, but they don't necessarily have to contact the person who gave the tip is kind of something they told us without actually commenting directly on this current situation.

But I think that, given the amount of fraud that we've been reporting on lately in Minnesota state government, I think it's probably been a wakeup call for a lot of the agencies, including DHS.

CATHY WURZER: Yes. Patrick, we have less than 30 seconds, but what will you be looking to learn next in this investigation?

PATRICK COOLIGAN: Well, we're certainly paying attention to how the federal investigation plays out. And that could certainly lead to warrants and charges in the relatively near future.

CATHY WURZER: Thank you for your time.

PATRICK COOLIGAN: Always a pleasure.

CATHY WURZER: That was Patrick Cooligan, Editor-in-Chief at the Minnesota Reformer.