The New Michigan Medicaid Fraud Machine

Editor's note: Welcome to Corruption Watch, our brand-new weekly column headed by Restoration News Senior Fellow Walter Curt—a seasoned investigative journalist exposing the leftists, illegal aliens, and NGOs defrauding John Q. Taxpayer from coast to coast. We're proud to partner with WC Dispatch to bring you the latest from Walter's on-the-ground investigations, beginning in Michigan. 

When Michigan Democrats took full control of Lansing in 2023, they did what political machines always do when they finally get both hands on the levers: They started taking care of their friends.

Predictably, the payouts came fast.

From 2022–2023, Medicaid spending across just five Medicaid billing codes skyrocketed by over $350 million. The biggest jump was in home health and personal care billing, one of the hardest areas in the system to verify cleanly and one of the easiest to game. These payments ballooned by 92 percent in a single year. 

Nobody in Lansing pumped the brakes. The only reason any oversight arrived at all was because the federal government mandated it—and by the time Michigan got around to complying, the lanes were already wide open and the money was already gone.

The Democrats in Lansing then refused to provide any oversight on the taxpayer money they spent—flat-out refusing to implement electronic visit verifications for home health care. 

Once the money started moving, it started landing in familiar places. Millions of dollars flowed into the nonprofit ecosystem Democrats routinely protect, fund, and hide behind: Refugee-service operators, behavioral health nonprofits, disability service groups, and the broader "underserved community" machine that always seems to be standing closest to the spigot when government opens a new one.

Michigan taxpayers did not get a cleaner system. They got wider lanes, fatter payouts, and the moralized cover story that always shows up after the cash is already gone.

In fact, taxpayers didn't even get most of the payouts—they went to illegal immigrant communities instead.

The Trifecta

The November 2022 elections gave Governor Gretchen Whitmer's Democrats total control of Lansing: the governor's mansion, the House, and the Senate. By January 2023, the trifecta was in place and there was nobody left with the power to slow what came next.

They moved quickly. By March 2023, the state had already put a major behavioral health expansion in motion, widening the Behavioral Health Home program across much more of Michigan and making it effective by May 1. Later that year, Lansing followed with reimbursement changes that pushed even more money into the same vulnerable Medicaid service world. 

It was all sold as care. Except nobody knows if it went to caring for actual patients or beneficiaries. 

The Floodgates Opened

Democrats did not need to invent new billing codes because they didn't have to. What the trifecta did was make existing programs easier to tap, easier to expand, and much harder to police once the money started moving.

The most important lanes were home healthcare, personal care, and behavioral support services, exactly the kind of programs Democrats love to sell with the usual sermon about the vulnerable, the poor, the marginalized, the underserved, and all the rest of the moral camouflage. 

T1019 covered personal care: Help with bathing, dressing, eating, and other daily tasks, often billed in 15-minute increments inside private homes where almost nobody can verify what really happened. That makes it one of the easiest lanes in the system to pad, exaggerate, or flat-out game. Billing codes H2015 and H2016 live in the same general behavioral support world, community-based services, weaker oversight, softer documentation, and endless room to hide behind therapeutic jargon. Add autism treatment and other support-service codes and you get the same pattern all over again: Billing lanes that sound laudable, but are difficult to police and perfectly designed to commit fraud.

That is why these payment lanes mattered. This is where Michigan Democrats went to work—in the softest parts of the system, where oversight is weakest and moral cover is easiest.

The fraud is not theoretical. Already, state and federal authorities have charged a few dozen defendants in large Medicaid fraud schemes involving pharmacy services. But that's just the tip of the iceberg.

Then the Money Exploded

The numbers are not subtle. In calendar year 2022, Michigan Medicaid paid about $1.45 billion across the five-code basket at the center of this story. In calendar year 2023, that total rose to about $1.81 billion. That is roughly $356 million in additional taxpayer money moved through those lanes in one year, almost a 25 percent jump in a single year.

The most obvious example sits in T1019—the 15-minute increment personal care billing inside private homes, one of the easiest lanes in Medicaid to inflate and one of the hardest to verify cleanly once the claim is filed. In 2022, the state paid about $198.0 million through that code. In 2023, it paid about $380.8 million–a 92.4% jump in a single year.

What makes that number even dirtier: the total number of providers did not explode along with the money. From 2022 to 2023, the number of providers billing T1019 grew by just 17.9 percent, from 39 to 46. The money grew more than five times faster than the provider base.

That is not a wave of new providers flooding into the system. That is an existing lane getting fatter. Average payout per provider jumped by about 63 percent in a single year, from roughly $5.1 million to $8.3 million. They were not just billing more. They were pulling far more money out of one of the easiest parts of Medicaid to manipulate and one of the hardest parts of the system to check once the claim was already in the door.

The other lanes followed the same pattern. H2015, one of the broad behavioral support codes, added roughly $73.6 million from 2022 to 2023. H2016, another community-based behavioral-service code, added about $52.2 million. 97153, tied to autism treatment, added about $41.1 million. S0280, more behavioral home healthcare, added about $6 million. Different labels, same play. Democrats opened the door, changed the payouts, and the money started flowing.

The only question was who got there first.

The Protected Class

That is where the pattern stops looking theoretical and starts looking organized.

Our analysis of the 2023 billing explosion identified a cluster of providers tied to immigrant, refugee, 'diverse', and underserved communities. Across just 16 providers we could verify to the penny, we found $72.3 million in post-expansion billing. Not random noise. Not a coincidence. A massive stream of taxpayer money moving through the same general service-and-advocacy ecosystem Democrats are always expanding, defending, and using as moral cover.

That is where the grift starts to come into focus. Once Democrats changed the payouts and made these lanes easier to tap, the money did not scatter at random. It started landing inside the same orbit of refugee-service operators, immigrant-community networks, underserved-population nonprofits, and ethnically aligned service groups that always seem to be standing closest to government when a new spigot opens.

What came next was not prevention. It was damage control. Once the surge was impossible to ignore, the priority was no longer stopping the blowout before it spread. The priority was containing the optics after the money was already out the door.

Forced to Act

Then came the part Lansing did not choose on its own: Oversight. Michigan did not suddenly discover the need for tighter controls because state officials got serious about abuse. The federal government forced the issue. Electronic Visit Verification (EVV) was not some homegrown reform effort out of Lansing. It was a federally mandated requirement, and Michigan moved on it late, after the lanes were already widened and the money was already moving.

On paper, EVV sounds like a serious control. In practice, it only provides the most basic oversight, and Michigan's rollout came after the surge was already visible in the numbers and after the billing structure had already changed. Democrats in Lansing did not get out in front of the problem. They were dragged toward basic oversight after the fact.

And the numbers tell the story. Spending across the five-code basket jumped from about $1.455 billion in 2022 to about $1.812 billion in 2023, then slipped to about $1.660 billion in 2024. So yes, it came off the peak. But even after the federal mandate forced some tightening, spending was still more than $200 million above where it had been before the blowout.

That is the scandal. The spigot never really closed. Lansing did not clean this up on its own. Washington had to force basic verification onto the system after the blowout was already visible. By then the habits were set, the money was out the door, and taxpayers were still stuck with higher payouts to Democrat cronies, even with the so-called "oversight."

The Racket

The public story was access. Compassion. Underserved communities. Behavioral health support. Better care closer to home. The administrative reality was something else: one-party government exploited Medicaid billing codes, flooded them with public money, and then watched that money move into the same nonprofit ecosystem Democrats regularly fund, defend, and hide behind.

Oversight just gets in the way.

And that is how this racket works in modern form. Not always with a brown envelope slid across a table. Sometimes it comes with a billing code. Sometimes it comes with a reimbursement bulletin. Sometimes it comes with a press release about dignity, inclusion, and care. The packaging is cleaner. The mechanics are the same. Open the lane. Move the money. Protect the beneficiaries. Shame anybody who asks where the money went.

That is what institutional capture looks like when it wears a politically correct face. Scrutiny gets painted as cruelty. Oversight gets recast as hostility to care. Taxpayer questions get treated like a moral offense. And the whole thing gets wrapped in the usual sermon about compassion after the cash is already out the door.

Who Opened the Gate?

So let's stop pretending the mystery is whether the money surged. The records say it surged. Let's stop pretending the mystery is whether nonprofit and nonprofit-linked beneficiaries were in the stream. They were. The real question, the one Lansing never wants asked out loud, is simpler: who opened the lanes, who got there first, who signed off, and why did the people running the system only start worrying about oversight after the cash was already moving?

Because this is where the story stops being general and starts getting specific. Do these clinics and their beneficiaries even exist? Which providers? Which addresses? Which ownership structures? Which shared officers, board members, billing relationships, and administrative ties? Which agencies made the decisions? Which officials approved them? Who saw the surge first, and what did they do when they saw it?

They're next.

MORE FROM THE FRONTLINES:

     Wisconsin Medicaid Fraud: Wisconsin Medicaid Fraudster Who Wrote Her Name in Diamonds Gets 10 Years

     Big-time Fraud in Minnesota: Misplaced Millions in MinneSomalia

     Insane Blue State Spending: Oregon Taxpayers Are Funding a Legal Army to Fight Federal Immigration Enforcement

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