How big a mess? No one really knows, because those running the bureaucracy—and those supposed to cover it in the press—have shown remarkably little curiosity about what is happening inside our state government. The LUMA accounting system, for example, has been associated with serious implementation problems, including duplicated payments and delays in reconciling transactions across agencies, raising basic questions about whether the state can accurately track where taxpayer dollars are going. That alone should trigger a call for independent, external audits.
There has long been a reluctance to examine Medicaid fraud in Idaho. Powerful corporations—both private and nonprofit—hold extraordinary influence over the very bureaucracies meant to regulate them, including large hospital systems and insurance carriers that wield significant political leverage in Boise and in our municipalities. Campaign finance records and event sponsorships make clear that these institutional players, not ordinary citizens, provide much of the money that sustains the political class, including high‑profile events such as the Governor’s Cup. The result is predictable: the interests of citizens, taxpayers, and patients fall behind those of institutional power.
The Founding Fathers had a word for such arrangements. They called them “factions.” In Federalist No. 10, James Madison warned that factions—groups united by special interest—can be averse to the rights of other citizens or to the long‑term public good, especially when they gain control of the machinery of government. That insight applies as much to today’s health‑care and insurance lobbies as it did to 18th‑century mercantile and landed interests.
Meanwhile, other states are starting to uncover just how vulnerable their Medicaid systems are to exploitation. A December 7 Wall Street Journal piece by editorial board member Allysia Finley describes in detail how Minnesota’s welfare scandal has exposed widespread fraud tied to autism services funded by Medicaid. Autism diagnoses among children have more than tripled in the past 15 years, and one major factor, Finley reports, is that Medicaid pays extremely generous rates for autism‑related diagnoses and therapies—sometimes tens of thousands of dollars per child per month—while states rarely verify that diagnoses are valid or that treatment is delivered by qualified specialists.
Children covered by Medicaid or the Children’s Health Insurance Program (CHIP) are now far more likely to be diagnosed with autism than those with private coverage, and many lower‑income children are labeled autistic when they actually have broader behavioral or developmental issues. This surge in high‑reimbursement diagnoses, combined with weak oversight, has created fertile ground for fraud and abuse. If this is the pattern in multiple states, the obvious question for Idaho is: how are we doing at verifying diagnoses, catching upcoding, and preventing fraudulent billing in our own Medicaid program? The troubling answer is that very few people in authority seem interested in finding out
Recent federal and state enforcement activity highlights how serious the problem has become. Federal and state prosecutors have charged autism service providers with paying kickbacks to parents in exchange for enrolling their children in Medicaid‑funded programs, then billing the government for inflated or entirely fictitious services. In one prominent Minnesota case involving an autism provider, authorities allege a multi‑year scheme in which parents were paid monthly cash kickbacks—often in the hundreds of dollars per child—to steer or retain Medicaid‑funded clients, while the provider submitted millions of dollars in false claims. These are not one‑off errors; they are deliberate business models built around exploiting Medicaid.
Audits from the Department of Health and Human Services Office of Inspector General (HHS‑OIG) have found tens of millions of dollars in improper Medicaid payments for Applied Behavior Analysis (ABA) therapy in states such as Wisconsin and Indiana. In Wisconsin, OIG identified at least 18.5 million dollars in improper fee‑for‑service payments for ABA during just two years, with every sampled claim containing one or more problems such as inadequate documentation, missing signatures, unqualified staff, or billing for non‑therapy activities. In Indiana, OIG concluded that at least 56 million dollars in ABA claims did not meet federal and state requirements, again finding that all audited claims had one or more improper or potentially improper elements, including unsupported billing codes and overlapping service times.
Since federal guidance in 2014 required state Medicaid programs to cover medically necessary autism services such as ABA for children, spending has risen sharply nationwide, and ABA has become a defined “risk area” for Medicaid compliance. Legal and policy analysts now warn that the combination of high reimbursement rates, complex documentation rules, and rapid growth in autism‑related services has attracted both legitimate providers and bad actors, prompting heightened audits, tougher fraud‑control efforts, and in some states reductions in rates or caps on service hours. Advocates for families worry that poorly targeted crackdowns may reduce access and quality for children with genuine needs, even as enforcement agencies try to claw back improper payments.
The common patterns are by now well documented: providers billing the maximum authorized hours regardless of whether children actually attend sessions, fabricating progress notes to justify claims, using unqualified or poorly supervised staff to deliver services, and paying cash or other benefits to parents or referral sources in violation of anti‑kickback laws. Enforcement agencies emphasize that kickbacks distort clinical decision‑making, drive overutilization or phantom services, and are often funded directly from fraudulent Medicaid billings. In other words, taxpayers are effectively financing the very kickbacks that keep the schemes running.
If this is what federal auditors and prosecutors are uncovering in other states, Idaho would be naïve to assume that its own Medicaid program is somehow immune. The known problems surrounding LUMA—delays, reconciliation difficulties, duplicated payments, and confusion among agency staff—only compound the concern that state leaders lack reliable visibility into where Medicaid dollars are going and whether those dollars correspond to legitimate, medically necessary care. A system that struggles to keep basic accounts straight is unlikely to excel at detecting subtle fraud schemes buried in highly technical claim lines.
Idaho’s citizens and lawmakers should not accept a “trust us” answer any longer. With national enforcement actions exposing widespread abuse, and with our own accounting platform under strain, it is incumbent on Idaho’s elected officials, agency heads, and auditors to demand a rigorous, independent examination of Medicaid in this state. That examination should not be limited to autism services, or to a narrow slice of providers, but should encompass all billing codes, services, providers, and insurers participating in the program.
Whistleblowers within the executive branch, including those working in health and welfare, finance, and auditing roles, have a critical part to play in bringing problems to light, and they deserve protection and encouragement from both the legislature and the Attorney General. Federal oversight can and will continue, but Idaho has a responsibility to police its own house rather than waiting for outside investigators to do the job.
The choice is straightforward. Either Idaho confronts the risk of Medicaid fraud and mismanagement head‑on—with transparent audits, strong enforcement, and a willingness to challenge powerful factions—or the state continues to look the other way while vulnerable children are used as billing instruments and taxpayers foot the bill. Let the chips fall where they may.
