Nebraska named in expanded Congressional Medicaid fraud investigation

Nebraska is one of 10 states – and the only one with Republican leadership – named in a congressional probe into Medicaid fraud.

The U.S. House Committee on Energy and Commerce announced the “expanded investigation” last week “amidst reports and law enforcement actions that have demonstrated high levels of Medicaid fraud.”

The other states targeted are California, Colorado, Massachusetts, Maine, New York, Pennsylvania, Vermont and Washington.

A letter sent to Nebraska Gov. Jim Pillen and Department of Health and Human Services CEO Steve Corsi on March 3 requested detailed information on the state’s investigatory processes, previous improper payments and recovery efforts and past and present audits. It requests written responses to the questions and documentation by March 17.

Jeff Powell, the communications director for DHHS, said the agency received the letter and is developing a response to the requested information. He said the department "maintains multiple layers of fiscal and programmatic safeguards designed to protect taxpayer dollars, including rigorous oversight, auditing and enforcement measures."

The letter mentioned Nebraska’s increase in spending for applied behavioral analysis, or ABA, services, a type of therapy often utilized for children with autism. Between 2020 and 2024, Nebraska saw a nearly 1,800% increase in Medicaid spending for ABA services. In 2024, the state paid about $85 million for ABA services to more than 1,500 families.

Nebraska has since lowered ABA reimbursement rates to match surrounding states, which is expected to decrease spending. But the letter cites a Nebraska audit report from September that found issues like duplicate invoices, missing documentation and lack of credentials in the ABA program.

The letter also references a number of individual Medicaid fraud cases that have occurred in Nebraska in recent years – like a Medicaid personal assistance provider in Omaha who was found guilty of billing for services that she never performed, and a Lincoln therapist who was convicted of Medicaid fraud for submitting false claims.

The investigation comes after claims of widespread fraud in Minnesota, which led to the federal government withholding Medicaid funding from the state and heightened scrutiny of Minnesota Gov. Tim Walz. In a statement, Pillen said he immediately ordered DHHS "to conduct an internal review to confirm that similar fraud is not happening here in Nebraska" after "the widespread fraud under the Walz administration came to light."

Nearly 350,000 Nebraskans are enrolled in Medicaid, and about half of them are children, according to health research nonprofit KFF. The federal government covers about 70% of the program’s cost.