Committee report: Nonemergency Medical Transportation

Nonemergency Medical Transportation Monday, March 2, 2026100

Background:

Nonemergency Medical Transportation (NEMT) is a Medicaid benefit that ensures eligible individuals can access healthcare services when they lack reliable transportation. At the federal level, states must provide necessary transportation to and from covered medical services as part of Medicaid. Minnesota has seen significant NEMT fraud in recent years resulting in multiple prosecutions.

The fraud in NEMT was first brought to the Committee’s attention by a Managed Care Organization (MCO) whistleblower whose compliance staff had flagged usual billing patterns for rides that didn’t seem to make sense. The MCO had reported their concerns to DHS but had not received any response, so they reached out to us.

Upon further investigation, the Committee’s staff realized this fit the pattern seen in other programs – interconnected webs of service providers who worked together to bundle billable services. In this case, the common thread seemed to be NEMT providers working with interpretative service providers who billed for real or possibly fake clients needing rides to sober homes, mental health services or naloxone treatment centers.

The Committee held a hearing to better understand the scope of NEMT fraud and statutory changes may be necessary to strengthen internal controls.

Finding: The Pitstop 66 case demonstrates that the NEMT program is structurally unsound and invites fraud.

The first major NEMT fraud scheme occurred in St. Cloud, where a therapy clinic saw a massive surge in clients after interpreters began promising to recruit new clients for the clinic. These interpreters also arranged transportation for these clients and encouraged the clinic owner to open a new location in Anoka, 60 miles from St. Cloud. Drivers would then bring groups of clients to the clinic, but bill as if separate individual rides had occurred. Overbilling also occurred for the therapy itself.101

The complexity of this fraud scam and the several “stops” in it across multiple types of programs and providers spawned the “Pitstop 66” investigation, undertaken jointly by the MN Attorney General’s Office, the Bureau of Criminal Apprehension (BCA) and the Dept. of Human Services Office of Inspector General (DHS OIG).102 Pitstop 66 centered around part of the Somali community in Faribault where the same basic scheme was occurring, but at a larger scale.

100 YouTube video, House Fraud Prevention and State Agency Oversight Policy Committee 3/2/2026. 101 Deena Winter, “How Fraudsters Have Gamed Minnesota’s Medicaid Program for Millions,” Minnesota Reformer, Sept. 20, 2024. 102 Luke Sprinkel, “State’s ‘PITSTOP-66’ Investigation Uncovers Widespread Medicaid Fraud,” Alpha News, July 11, 2024.

In March of 2024, the Minnesota Attorney General brought criminal charges against 19 people related to the scheme. In February, one of the ringleaders, Nasro Takhal, pled guilty. Her particular scheme defrauded $2.6 million from Medicaid.103

In examining the Pitstop 66 case, the Committee observed the following program integrity gaps in NEMT: 1. Weak and fractured oversight: Both MNDOT and DHS had oversight responsibilities and multiple Medicaid programs were involved in billing. No single agency has full responsibility for the NEMT program. 2. Mileage-based incentives: Because program reimbursement increased with distance, the NEMT program created incentives for long, unnecessary trips. 3. Preauthorization loopholes: Since DHS regulations did not require trips under 60 miles to obtain pre-approval, fraudsters routed patients just under that threshold. 4. Fragmented billing system: Because transportation, interpreter, and clinic billing were separate systems, it was relatively easy for fraudsters to create “phantom” combinations of claims.

In an effort to address some of these issues, in 2025 the Legislature passed a bill requiring DHS to phase-in a requirement for either statewide or regional contracting for NEMT administration. Prior to this change, DHS was prohibited from contracting with a statewide broker.

While a statewide broker may address some issues, concerns were raised about one broker’s past history with fraudulent billing in other states and rural providers expressed concern that a statewide broker would not adequately address the differences in billing and scheduling between rural and metro providers.

The Committee will be watching closely to see if this new requirement actually improves the regulatory oversight of the NEMT program and reduces the amount of fraud.

Finding: Fraud schemes similar to the one uncovered in Pitstop 66 extend to other networks.

In its investigation, the Committee observed that the complex scheme of recruiters and multiple providers in the Pitstop 66 case is not unique, and appears to exist throughout the NEMT program. Testimony from PrimeWest, an MCO, confirmed this suspicion:

Prime West: “We uncovered a suspected fraud scheme involving certain NEMT providers. We identified instances where members were reportedly offered kickbacks from drivers, members were encouraged to travel to more distant methadone clinics, including from Northern Minnesota to the Twin Cities in exchange for higher kickback payments. Drivers were recruiting members to utilize specific treatment centers and they would coach the members on how to answer assessment questions so they could qualify so that they could qualify for services. NEMT

103 Lou Raguse, “Inside One of Minnesota’s Most Complicated Fraud Cases,” KARE 11, Feb. 16, 2026.

agencies financially incentivize drivers to recruit and transport as many members as possible in a single vehicle so they could bill mileage for each person in that vehicle”

PrimeWest proceeded to identify oversight gaps similar to those seen in Pitstop 66:

1. Red flags are missed by standard license checks (such as multiple drivers being associated with the same address). 2. Limited visibility on how many riders are in a vehicle while mileage is billed separately. 3. NEMT claims are often paid months after the service has been provided. 4. Lack of prior authorization for certain key services where it should occur.

Finding: The vulnerabilities enabling this scheme could be addressed by implementing a widely available technology solution, but DHS refused to commit to supporting such a change.

The Committee next heard testimony from Michael Weidner, the Executive Director of Minnesota Paratransit Providers Association. Weidner described patterns of fraud in NEMT and DHS’s response:

Mr. Weidner: “Fraud is not new to NEMT, what is new, is DHS’s lack of any attempt or desire to curb fraud. This DHS apathy is disgusting. The lack of ambition at DHS occurred when DHS introduced a broker into the NEMT program.” Weidner described that his organization had prevented fraud by use of a “chain of custody document” that required documented sign-offs when a client is transported. Weidner pointed to a DHS policy change that ended this key anti-fraud measure:

Mr. Weidner: “The chain of custody requirement was removed when DHS started contracting with a broker. In 2009, I filed a whistleblower claim with The US Attorney regarding the NEMT broker under the False Claims Ace. The US Attorney investigated this matter, and informed me, yes, the NEMT broker had billed for serviced not rendered. However, DHS was fully aware of that overbilling, and DHS had consented to the billing, so therefore, it was not considered fraudulent billing under the False Claims Act.”

Rather than large administrative changes, Weidner suggested mandatory GPS tracking and camera use, a common-sense solution already in use by transportation companies. According to Weidner, such technology would prevent fraud by verifying rides, mileage, and the number of individuals in a vehicle.

Mr. Weidner: “What the woman had talked about just before me, about the fraud, about the activities, those have been going on forever. We’ve tried to work with DHS, since at least 2015 and said, “require GPS, require cameras.” DHS’ answer to me was “how much is it Mike?” I said it’s $30 per vehicle, per month. DHS told me that was too much for an NEMT driver to have to pay.”

When the Committee asked if DHS would support requiring NEMT drivers to use cameras and GPS tracking, the agency responded that they would consider the idea, but could not commit to supporting legislation.

The Committee was dismayed to hear this equivocation, given that Mr. Weidner had proposed the idea more than a decade ago. To the Committee, this episode is emblematic of DHS’s lack of a sense of urgency to implement program integrity measures to address the massive fraud Minnesota is facing. DHS must do better.

Finding: The significant lag in submitting NEMT bills may contribute to fraud, particularly if NEMT bills are not tied back to the bills submitted by service providers.

Weidner also presented the Committee data showing a massive drop, over 60%, in in NEMT rides over the last year.104

DHS stated that this odd trend in the data is because NEMT bills may be submitted up to a year after services are rendered. The Committee finds that it is quite unlikely that a large number of providers would wait for months after providing services to get paid, especially if, as DHS claims, providers are arguing that a $30 per month integrity measures is too large of a financial burden.

The Committee expressed concern that permitting such long billing submission cycles may engender backdating or falsifying records, as was seen in the St. Cloud case. The Committee believes this should be a red flag and that providers who submit bills a year after services are rendered should be subject to higher scrutiny and that the permissible billing cycle should be shortened.

Summary:

Based on whistleblower reports and public testimony at the hearing, it appears that NEMT fraud has been ignored by DHS for more than a decade. Given the obvious red flags and multiple indictments, the Committee believes DHS should take immediate steps to reduce the billing cycle, use AI to compare NEMT bills to those submitted for the same client for other services, and support legislation to require use of cameras and GPS monitoring of NEMT providers.

Our investigation shows that the fraud in NEMT has been ongoing, significant, and preventable. The Pitstop 66 fraud was breathtaking in its scope and brazenness, and our investigation revealed this this scheme is being repeated across the state. For inexplicable reasons, DHS failed to see clear warning signs and has not implemented known and common-sense steps that would significantly limit the fraud. We call upon DHS to move quickly to end the fraud in NEMT, or the legislature should step in and enact significant reforms.

104 3/2/2026 Committee Document “Michael Weidner Presentation.”