Indiana governor launches group to root out fraud, abuse in federal social safety net programs

Indiana leaders will give “extra” scrutiny to Medicaid and other federally funded, state-administered social services programs as part of a new entity focused on fraud, waste and abuse.

Gov. Mike Braun created the Council on Fraud Detection and Prevention in a Monday executive order, which notes Indiana runs the same child nutrition programs implicated in Minnesota fraud schemes. Federal investigations began in 2021 and the first round of criminal charges were unveiled in 2022.

In December, newer allegations of fraud into child care programs arose in Minnesota.

“What happened in Minnesota, that is fraud,” Braun said in an interview Tuesday.

“This (order) was to highlight, based upon what we’ve seen in some states, where it’s been so loosely run it encourages fraud — not to mention, ‘loosely run’ means you’re going to be spending more for it, and that’s a disservice to the individuals that need the Medicaid benefits,” he said.

“So, this is simply to put focus on it,” Braun added. “Even though we’ve been watching it, it kind of formalizes what we need to do to be on guard going forward.”

Also listed for review are the Supplemental Nutrition Assistance Program; Temporary Assistance for Needy Families; the Women, Infant, Children program; the Child Care Development Fund, the Older Youth Initiative and special education programs.

Agency heads will meet at least quarterly to coordinate the state’s handling of federal programs, including by finding ways to detect and prevent fraud — and recover defrauded funds. A report on their activities is due to Braun, the attorney general and lawmakers annually by Nov. 1.

Indiana’s Office of Inspector General is already responsible for investigating and addressing fraud, waste, abuse and wrongdoing in executive branch agencies.

Braun said his directive “punctuate(s) what we think is important.”

The council “may not find any more than what the inspector general (finds) … but we’re going to put special attention on it, just to make sure,” he said. “And, I hope it finds nothing.”
 

Both beneficiaries and providers will face additional scrutiny.

“We’re tightening up on both sides,” Braun said.

“If it’s there, we’re going to ferret it out,” he said of fraud. “And anybody that’s guilty of it, it’s not going to be a slap on the wrist. You know, you’d be held to account either criminally or civilly if you’re part of fraud.”

In a news release on Monday, Braun’s office also promoted savings found across the administrative branch last year, calling them “wins for protecting Hoosier taxpayer dollars.”

The Department of Revenue, for instance, totaled $80 million in stopped or adjusted individual tax returns “due to fraud,” as well as $12 million for business tax returns. The agency also identified and took action on more than 10,000 stolen identities.

The Department of Administration calculated a 163% increase in quantity purchase agreements — procurement deals negotiated at the state level to benefit state agencies and sometimes local governments. IDOA also boasted a 232% increase in competitive procurements.

And at the State Personnel Department, Braun’s administration claimed that eliminating 2,000 positions that were vacant for more than 180 days saved $1 million in administrative costs.

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