The Minnesota Department of Human Services announced Monday, Feb. 2, that it’s recruiting 168 people from the state government’s 40,000 employees to help the agency conduct unannounced site checks of Medicaid providers in order to combat fraud.
The site checks are part of a new effort by the state to “revalidate” all 5,800 providers of 13 Medicaid services deemed high-risk for fraud, waste and abuse by DHS.
Revalidation involves reviewing provider documents and owners’ background checks, visiting providers in person, and conducting screening reviews before and after in-person visits.
DHS Deputy Commissioner John Connolly called the effort “unprecedented” in a press briefing. The state normally revalidates providers every three to five years, he said.
“We’ve never done anything on this scale before with provider revalidations,” Connolly said. Staff training will begin in February, and unannounced site visits will begin soon after, he said.
The new program, which state officials named “Minnesota Revalidation,” comes as the Walz administration faces significant national scrutiny for how it has handled fraud in Minnesota’s public programs.
President Donald Trump has used the fraud issue to attack Minnesota’s Somali-American community and justify sending 3,000 immigration agents to the state — an aggressive campaign that’s coincided with the killings of Alex Pretti and Renee Good by federal immigration agents in recent weeks, among other incidents.
A viral video published in December by right-wing influencer Nick Shirley claiming to uncover new fraud in Minnesota day cares led to announcements of more federal scrutiny of Minnesota’s safety net programs.
Ongoing fraud prevention effort and federal threats to pull fundingThe 13 high-risk Medicaid programs provide critical services to disabled and elderly Minnesotans. Another program, Housing Stabilization Services, was so riddled with fraud the state shut it down.
The state has also launched a different fraud prevention effort called prepayment review, which audits claims for the 13 Medicaid programs. DHS abruptly delayed payments to all providers in those programs in December as part of the prepayment review process, a move which providers said caught them by surprise and interrupted payrolls, leaving Medicaid recipients without care.
Former Assistant U.S. Attorney Joe Thompson, who has prosecuted several social services fraud cases in Minnesota, said in December that he suspects at least $9 billion paid to the 13 high-risk Medicaid programs — plus Housing Stabilization Services — since 2018 have been fraudulent.
Connolly told reporters at the time that the DHS has evidence that substantiates fraud totaling tens of millions in these programs to date, not $9 billion; Gov. Tim Walz called the estimate “sensationalized.”
In response to federal scrutiny over the Medicaid programs, DHS submitted a “corrective action plan” to the federal government in December to outline how it plans to detect Medicaid fraud. The plan was rejected through what Connolly said was an outdated federal audit of DHS.
In early January, the Trump administration then said that it intends to withhold $2 billion of funding toward the high-risk Medicaid programs from Minnesota. Connolly has said that the $2 billion in federal funding is an overestimation of what the state calculated is closer to $1.2 billion per year.
The state is appealing the federal government’s decision to withhold funds and also submitted a revised corrective action plan Friday. The appeal process will take at least a couple more months, Connolly said.
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