Minnesota regulators confirm open investigations into two autism therapy providers, including a center operated by a longtime friend of Democratic Senate front-runner Peggy Flanagan.
Minnesota's widening Medicaid fraud scandal has reached the inner circle of the state's Democratic Senate front-runner. The Minnesota Department of Human Services confirmed it has open investigations into two autism therapy providers, including a center run by a longtime political ally and personal friend of Lt. Gov. Peggy Flanagan.
The department also said both agencies were cut from the Medicaid program months ago during a state credentialing review. The confirmation arrived as Flanagan, the Democratic nominee for the Senate seat being vacated by Tina Smith, enters the final stretch of a midterm campaign already shadowed by fraud questions.
"These agencies are on our radar," a Minnesota Department of Human Services spokesperson said. The department confirmed open investigations into Spectrum Therapy Center and Milestone Development Centers, the autism center operated by Nimco Ahmed.
Because the cases remain open, the department said it cannot disclose further details by law. It did confirm that both providers were terminated from the Medicaid program several months ago as part of Minnesota Revalidate 2026, a process that verifies agencies hold the required credentials and comply with state and federal regulations. Both providers have appealed their termination. In its statement, the department said the terminations were part of a broader credentialing push and that state law bars it from discussing open cases while they proceed. That restriction means a full public accounting of what regulators found may not surface until the appeals conclude.
The disclosure adds another chapter to a fraud story that has already produced dozens of prosecutions. Federal prosecutors have charged 78 people in a scheme that started with a nonprofit called Feeding Our Future and that authorities now describe as theft worth as much as $9 billion, among the largest pandemic relief frauds in American history. The wave of Minnesota Medicaid fraud cases has drawn congressional scrutiny as well, with lawmakers pressing federal agencies over how so much money moved through state programs with so little oversight.
Ahmed is a longtime Minnesota Democratic-Farmer-Labor activist and is listed online as the chief executive of Milestone. She and Flanagan have described a friendship spanning nearly 25 years.
In December, Ahmed appeared beside Flanagan in a video recorded at a Somali market, where Flanagan wore a hijab and said, "The Somali community is part of the fabric of the state of Minnesota." The clip spread widely online, in part because Flanagan describes herself as Catholic on her campaign website and says her immigration views are grounded in her faith.
Republican criticism followed quickly once the investigation became public. Rep. Tom Emmer, the House Republican whip, called the appearance a "stunt" and argued that common sense voters see through it. A Republican rival of Flanagan has urged her to leave the Senate race outright. Flanagan's campaign did not respond to a request for comment on the state investigation.
A former therapist who worked at Milestone for two months in late 2023 told Minnesota-based Alpha News that he treated clients six days a week and never saw a qualified supervising professional or a board certified behavior analyst overseeing the work. He said many practitioners appeared unqualified and knew little about applied behavior analysis.
He also said he was never asked to write or sign the session notes that providers rely on to bill Medicaid, that the treatments he observed were ineffective, and that some clients did not appear to have autism. He said he noticed potential billing fraud red flags, though he was not involved in billing.
No criminal charges have been filed against either provider, and an open investigation is not evidence of wrongdoing. Both agencies are appealing their removal from Medicaid, which leaves the question of their future access to federal health care dollars before state reviewers.
The backdrop is a fraud problem that state officials have acknowledged for years. More than 400 Minnesota state employees raised internal warnings about fraud in state programs, and critics have faulted Gov. Tim Walz's administration for acting slowly on the signs. Republicans have made the scandal a centerpiece of their midterm messaging in Minnesota and nationally, and the state's autism therapy billing is one of the areas they have targeted most aggressively.
Two tracks now matter. The first is the appeals process, which will determine whether Spectrum Therapy Center and Milestone Development Centers can return to the Medicaid program or are barred from it permanently. The second is whether federal prosecutors in Minnesota fold the autism therapy allegations into the broader case they have been building since 2022.
For Flanagan, the political risk is the same question that has dogged her all year: what did she know, and when did she know it, about fraud running through programs in her own state. Watch for whether she addresses the investigation directly on the campaign trail and whether the GOP's Senate nominee keeps the issue in rotation through November.
Minnesota regulators confirm open investigations into two autism therapy providers, including a center operated by a longtime friend of Democratic Senate front-runner Peggy Flanagan.
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