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Dear Neighbors,

At the end of January, I visited the remote Pacific island nation of Palau [ [link removed] ] with new friends who came from a number of countries around the world. The question they all asked me was “Why Minnesota?” I explained that part of it was the fact that Governor Walz was part of the ticket that ran against Donald Trump last fall and, in my opinion, it’s also because no state has been more welcoming of refugees over the years than Minnesota. We have the largest population of Somalis outside Somalia and the largest population of Hmong outside of Laos. We have welcomed Karen people from Myanmar, Khmer from Cambodia, Ethiopians, Liberians, and we even have a thriving Tibetan-American community right here in Bloomington. I’d like you to know that people all over the world know what is happening here. They’re appalled by the news accounts they’re reading and it was heartwarming to learn that they’re all standing in solidarity with Minnesota.

Data Privacy

Have you ever wondered how your car’s navigation system is able to advise you about traffic jams ahead and recommend alternative routings? Behind the scenes, large amounts of data about the movements of smart phones and car computers is being continuously collected and fed to the computer systems powering these navigation systems. The data collected in this manner is considered “pseudonymous [ [link removed] ]”. It might include the manufacturer’s computer ID number for your phone (or car) and the advertising industry’s ID for your phone as assigned by Apple or Google (for Android phones) but it does not identify you personally. Data collected about your precise location and movements is considered “Sensitive Personal Data” under the Minnesota Consumer Data Privacy Act (MNCDPA) and cannot be sold to a third party unless its anonymity is maintained as it is used for valuable public purposes like informing vehicle navigation systems.

However, if a data broker can collect enough personal data tied to a particular device and/or advertising ID from enough different sources it might be able to deduce the identity of the owner of the device. To protect your privacy from unscrupulous data brokers, the MNCPDA "explicitly prohibits" data brokers from trying to identify the subjects of pseudonymous personal data.

This past week, the Minnesota Star Tribune reprinted a New York Times article entitled “How ICE Already Knows Who Minneapolis Protesters Are [ [link removed] ]”. The companies named in this article as providing data to ICE could not be doing what they say they are doing without violating this and other provisions of the MNCPDA. You should be pleased to know that the Minnesota Attorney General’s office is pursuing an investigation of these companies, who are assembling these data profiles about ALL OF US, not just immigrants, without our permission, and are making this data available to their clients WITHOUT WARRANTS.

On Saturday, the Strib reprinted a Shahan Journal article providing additional information under the heading “ICE isn’t just tracking your phone. The surveillance technology goes further.” [ [link removed] ]

Big Brother is truly at the door.

Drug Marketplace Reforms

As described in this New York Times article [ [link removed] ] reprinted in the Strib, Congress has passed a bill reforming the business practices of the “Pharmaceutical Benefit Managers” (PBMs) that control your access to the drugs included in your health plan’s “formulary”. This is a complex issue that Senator Mann and I have been working on for several years and it appears that the new law includes several of the provisions that we have been advocating, including provisions that would require PBMs and Plans to pass along drug rebates from drug manufacturers to the patients taking the drugs in the form of lower prices. The devil is in the details, and we will be studying the new law with the help of our research staff, but this looks like it could be a big win for consumers when it becomes effective for the 2028 health plan year.

Fraud Update

Since I last wrote about this issue, I have been following up with the staff of the Department of Human Services (DHS) and Minnesota Information Technology Services (MNIT) about the concerns that I expressed in my previous legislative update [ [link removed] ]. These follow-up conversations have crystalized my observations to the point that I now feel confident in outlining what, for now, can be called “the Elkins plan”. I am hoping that the Walz Administration incorporates these plan elements into its own plan as part of its supplemental budget proposal for the coming session.

This Thursday, I will be presenting this plan at a “Focus on Fraud” gathering organized by our Republican neighbors under the aegis of the Residents for a Better Bloomington organization. The event is open to the public,there is no registration fee, and there will be security. Joining me on the dais will be my GOP House Fraud Committee colleague, Rep. Walter Hudson. Everyone who agrees to observe basic standards of decorum is welcome to attend and I hope to see you there to participate in the discussion – it’s a very large hall!


* *Location*: Bloomington Event Center [ [link removed] ] (the former Knights of Columbus Hall) 1114 American Boulevard West, Bloomington MN 55420
* *Time:*
* Social Hour: 6:00 to 6:45 PM
* Panel Discussion: 6:45 to 7:45 PM
* Q&A: 7:45 to 8:30 PM

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I have now served on the House Fraud Prevention Committee for almost a year now, and my membership on that committee has given me an opportunity to explore the root causes of the undeniably egregious levels of fraud we have experienced in Medicaid-related programs administered by the Minnesota Department of Human Services (DHS). Working with my colleagues and with the staff of DHS and Minnesota IT Services (MNIT) I have learned that our most serious vulnerabilities are related to the obsolete systems that are used by DHS and county workers to administer these programs rather than any malice or incompetence on the part of these dedicated workers. They all share the goal of enabling the provision of services that are desperately needed by our most vulnerable neighbors. As the Legislature prepares to reconvene for the 2026 session these are the specific actions that I believe need to be taken to bring fraud in these programs under control while preserving access to these programs for the people who rely on them.

This plan provides specific actions, mostly investments in modernized information systems infrastructure to address specific weaknesses that I have identified in the processes used by the Department of Human Services (DHS) to manage its client base and its contract service providers, inadequacies in its acquisition and entry of essential data from authoritative sources, and blind spots created by the mis-organization of the data in the analytical systems it uses to manage programs and identity patterns of fraudulent activity. These deficiencies are longstanding in nature – spanning multiple administrations and legislatures in most cases—and they will not be solved overnight.

The lion’s share of the fraud that is being identified by the ongoing investigations is perpetrated by fraudulent businesses that invent non-existent clients or enroll real clients in programs without the knowledge of the client. For example, the Fraud Prevention committee heard testimony from one woman who only learned that she had been enrolled in the Medicaid Housing Assistance Program (now cancelled) when she received a related “Explanation of Benefits” form from her Medicaid health insurance provider.

DHS is fundamentally incapable of maintaining the integrity of information about the clients who enroll in their programs. In large part, this is because Medicaid program enrollments are managed in two separate enrollment and eligibility systems, METS for basic Medicaid and the 1980’s era MAXIS system for all cash benefit programs and ancillary Medicaid programs. The related claims are managed through MMIS, a third ancient mainframe COBOL system. There is no master client database and attempts to map client data across the multiple systems (the so-called Shared Master Index) have failed [ [link removed] ]. Client data is manually entered into MAXIS and there is no process for verifying the identities of enrollees or validating and aligning the data entered about them across the systems.

The solution to this problem is already available and waiting to be implemented. If you access your federal accounts (IRS, Social Security, Medicare, TSA) using Login.gov [ [link removed] ] you know that you had to go through a rigorous process of verifying your identity before your Login.gov account was approved to prevent fraudulent access to your accounts. Minnesota already has an equivalent capability called LoginMN [ [link removed] ] which is currently being tested as part of the rollout of the new Paid Family Medical Leave (PFML) program by the Department of Employment & Economic Development (DEED). The possession of a verified LoginMN account should likewise be a basic prerequisite for enrollment in any DHS Medicaid program and the verified information in the enrollee’s LoginMN record should be considered the authoritative source of basic personal information about the enrollee. Using their LoginMN accounts, clients should be required to initiate their own program enrollments through the existing MNBenefits [ [link removed] ] website to prevent fraudulent businesses from inventing clients or enrolling clients in programs without their permission.

Similarly, DHS is fundamentally incapable of properly vetting prospective contract service providers. The principals of these entities should also be required to establish LoginMN accounts, which would facilitate vetting using automated third-party services like Dun & Bradstreet and Thomson Reuters. As long advocated by my colleague, Rep Kim Hicks, most professional services funded by Medicaid should require licensing to ensure that providers are qualified to provide services.

Because the ancient MAXIS system used to process enrollment and eligibility for cash benefit systems has never been capable of ingesting data directly from other systems, all data must be manually keyed into that system. So, instead of electronically taking authoritative employment and income data taken from the regular employer submissions to the DEED Unemployment Insurance database, income data is manually keyed by county workers from the applicant’s easily counterfeited paper paycheck stub – and it must be keyed separately for each program enrollment. If the applicant has entered personal application information into DHS’ MNBenefits portal, that data must be printed out and rekeyed into MAXIS, as well. MNIT has now identified software that can be used to enable electronic data entry into MAXIS from external sources like MNBenefits, DEED, third party services such as “The Work Number [ [link removed] ]” as well as the “Federal Data Services Hub [ [link removed] ]” which provides electronic data services to verify the validity of social security numbers and federal income tax data. This would dramatically improve the accuracy of the data used to evaluate enrollment and eligibility applications and just as dramatically improve the productivity of the county caseworkers charged with processing enrollment applications. Implementation of this “Application Programming Interface Management [ [link removed] ]” software is a foundational capability that is a prerequisite to the implementation of most of the other software improvements discussed in this plan.

Another type of fraud is the padding of hours of service provided to clients in hourly service programs like day care or personal care attendant services for persons with disabilities. This type of fraud can be addressed with the universal use of Electronic Visit Verification (EVV) [ [link removed] ] systems as advocated by my colleague Rep. Mohamud Noor, co-chair of the House Human Services Committee. EVV systems require providers and their clients to electronically “punch in and punch out” when service delivery begins and ends to ensure that DHS is only paying for services that the client has received.

Finally, it seems like it should be trivial to identify patterns of fraud such as multiple fraudulent providers operating out of the same address. The reason that it’s not trivial is that the balkanization of systems that characterizes the front-end of the process is carried over into the back end analytic systems that are used to root out fraud. In DHS’s so-called “data warehouse”, there are separate, unintegrated piles of data, one for each administrative system, making it hard to connect the dots between fraud occurring in one system/program and fraud occurring in other systems/programs. In a real data warehouse, the data in these separate piles would be integrated into a single database where there would be standardized tables holding unified and authoritative data organized by subject (rather than by source) so that analysis of enrollments and claims by Client, Service Provider, Program and Time Period would be easy, regardless of the source of the data. Building a real data warehouse on a modern data analytics platform would require a substantial investment in both time and money, but it is also an essential prerequisite to a broader modernization program which would require the migration of “clean” legacy system data to more modern systems.

Ultimately, DHS’ ancient systems, themselves, must be replaced. Systems like MAXIS and MMIS are being held together with duct tape and bailing wire and it’s impossible to hire IT workers who are willing to code in DOS (MAXIS) and COBOL (MMIS). At any given time, there is a multi-year backlog of programming requests just to keep up with changes in federal and state laws and policies governing these programs. With recent changes in federal law, the State faces stiff penalties in programs like the SNAP nutrition program if it is unable to achieve federal standards of program integrity in these programs. The burden on the county workers charged with administering these programs is already crushing and the impact on our property taxes is growing. To its credit, DHS recognizes this and has initiated a promising modernization program called the Medicaid Enterprise System (MES) program [ [link removed] ] which must be funded by the legislature. While the cost of these system modernization efforts will be substantial and their implementation will not occur overnight, the payback in terms of fraud reduction and worker productivity will provide a rapid return.

*Keep in Touch*

Don’t hesitate to reach out if I can provide any assistance. Please follow me on my Facebook page [ [link removed] ] for further updates and invite your friends and family to do so as well. 

Thanks for the honor of representing you at the Capitol. 

Sincerely, 

Steve Elkins
Representative, District 50B
Minnesota House of Representatives
[email protected]






State Representative Steve Elkins

5th Floor, Centennial Office Building
658 Cedar St.
Saint Paul, Minnesota 55155

Phone: 651-296-7803
Email: [email protected]" (replies to this newsletter are not monitored)"
Website: www.house.mn.gov/50B [ [link removed] ]







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