Minnesota Removes High-Risk Medicaid Providers Amid Fraud Crackdown

Minnesota’s Department of Human Services has taken significant action by removing nearly two-thirds of the state’s highest-risk Medicaid providers. This decision follows a federally-mandated review aimed at combating fraud, part of a broader initiative from the Trump administration.

The department shared its findings on Thursday, revealing the conclusion of a thorough five-month examination of 5,583 providers across 13 high-risk programs. This investigation assessed whether these providers met the elevated legal and eligibility standards necessary for operation.

Out of the almost 5,600 reviewed, only 2,061 successfully met the revalidation requirements, allowing them to continue offering taxpayer-funded services without interruption. Unfortunately, 3,411, which amounts to 61% of those evaluated, were disenrolled from the program. According to the department, reasons for disenrollment included issues such as incomplete documentation (2,491), failed verifications during site visits (916), and four who did not pass background checks. Furthermore, 59 cases were forwarded to the department’s inspector general for deeper investigation, while 111 were dropped since they no longer provided high-risk services.

Many providers were said to offer, or claim to offer, essential support for vulnerable groups, including individuals with autism, mental health challenges, and disabilities. Following their disenrollment, these providers will lose access to federal and state funding and have a 60-day window to appeal the decision.

“More than 1 million Minnesotans deserve to have confidence and trust in the Medicaid providers they rely on for lifesaving and life-affirming care,” stated Deputy Commissioner Shireen Gandhi. “We are thankful for the providers who successfully navigated the revalidation process and will continue to deliver quality care.”

Gandhi also commented on the importance of accurate paperwork: “This is not just about checking a box. DHS utilizes the information to ensure requirements are met. And when we conduct site visits, what we observe must align with what has been submitted.”

The necessary paperwork required from providers included:

• Basic ownership disclosures along with the business or organization’s location and contact details.
• Current licenses, proof of insurance, and training documentation.
• Verification that a sufficient number of qualified service providers are available to fulfill their obligations.

The state collaborated with various groups, including counties and Tribes, to notify communities of the disenrolled providers. Additionally, a webpage was established to help Minnesotans navigate next steps if their provider is on the discontinued services list.

This review, which included evaluations across 87 counties, started in January when Minnesota faced increased scrutiny following reports from independent journalists about questionable activities tied to organizations that claimed to deliver social services funded by taxpayer dollars.

In response, Vice President JD Vance was assigned in January to work alongside the Department of Justice (DOJ) in addressing fraud-related schemes nationwide. Subsequently, in March, President Donald Trump initiated the Task Force to Eliminate Fraud through an executive order.

Recently, the DOJ announced a substantial fraud investigation in Minnesota, culminating in charges against 15 individuals accused of defrauding vulnerable residents. One alarming case involved a defendant who allegedly billed Medicaid for 24-hour care services that were never provided. Tragically, that patient was later found deceased, according to DOJ claims.