How have federal prosecutors calculated the $18 billion billing figure and what methodology did they describe?
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Executive summary
Federal prosecutors say providers in 14 Minnesota-run, state-administered Medicaid programs billed roughly $18 billion since 2018 and have estimated that “half or more” of that sum may have been obtained fraudulently, but they have not released a settled forensic loss figure because their calculation is still being informed by ongoing audits and criminal investigations [1] [2] [3].
1. What the $18 billion number represents and where it came from
The $18 billion figure is an aggregate of billed reimbursements flowing through 14 “high‑risk,” state‑run Medicaid services that state auditors are reviewing; prosecutors described it as the total amount billed to those programs since 2018, not a quantified finding of loss or proven fraud, and said their estimate of fraudulent activity is provisional pending audits and forensic review [1] [2].
2. Prosecutors’ descriptive methodology: program totals, patterns and audits
Prosecutors have described their approach in public remarks as combining program billing totals with patterns identified in investigations—such as shell companies that billed for services not rendered, operators placing beneficiaries in apartments and billing daily rates, and alleged kickbacks to parents to induce diagnoses—while cross‑referencing those patterns against state audit work of the 14 programs to flag suspect claims for deeper review [2] [3] [1].
3. How loss estimates are anchored in criminal practice and agent calculations
In federal fraud work prosecutors commonly use aggregated billing totals and case‑agent loss estimates to establish a baseline “loss” figure in indictments; that baseline then often becomes the anchor used by probation officers and courts unless rebutted with detailed financial proof, a dynamic that defense practitioners warn can inflate the government’s initial number if not rigorously challenged [4].
4. What prosecutors did and did not claim about the portion that’s fraudulent
While U.S. Attorney remarks publicly suggested “half or more” of the $18 billion could be fraudulent, he explicitly cautioned the figure is speculative and contingent on ongoing work; prosecutors have filed criminal charges tied to specific schemes and cited concrete recoveries (millions in some cases), but they acknowledged that precise, provable loss amounts will be established through audits, charging decisions and eventual case‑by‑case proofs [2] [3] [1].
5. Context and the limits of the public methodology
The estimate arrives amid a broader federal concern over improper payments—federal reporting shows a long history of large improper‑payment totals concentrated in a few big programs, signaling why a program‑level billing tally can yield very large dollar figures even before fraud is proven—but public reporting from prosecutors so far describes a process of sorting massive program billing totals, identifying recurring red flags, and relying on state audits and forensic accounting to transform billing aggregates into provable loss figures [5] [1]; the Department’s manual and standard prosecutorial practice also require disclosure and careful forensic work before final loss figures are used at sentencing or restitution, underscoring that the $18 billion is an investigatory starting point rather than a courtroom‑established loss [6].
6. Competing views and prosecutorial caution
State officials and audit leaders have publicly pushed back on how quickly prosecutors moved from billed totals to broad fraud estimates—DHS Inspector General described at least some public speculation as “shocking”—and prosecutors themselves repeatedly urged caution, saying the “half or more” comment is an early estimate subject to revision as audits proceed and as individual providers’ records are reconciled [1] [2].