Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Fraud And Enforcement topic
No spam. Unsubscribe anytime.
DHS urges stronger payment-withhold authority, anti-kickback law as part of governor’s anti-fraud package
Summary
DHS and the Bureau of Criminal Apprehension outlined gaps in existing authority to pause payments to suspected fraudsters and asked for legislation to expand transparency and to criminalize kickbacks not covered by current law.
Department of Human Services officials told the Fraud Prevention and State Agency Oversight Committee on March 17 that expanding payment-withhold authority and widening anti-kickback tools are central elements of the governor’s proposed anti-fraud package.
Temporary Commissioner Shereen Gandhi and DHS staff described payment withholds as "a temporary action to stop payments to providers during an investigation," and told the committee that the agency has used withholds roughly 725 times over the past five years while conducting about 4,000 investigations. Gandhi said the proposed changes would reduce the chance that a court would later overturn a department action by clarifying administrative authority.
Why it matters: Lawmakers and DHS staff said clearer authority to stop payments while administrative appeals are pending would better protect state funds and the people the programs serve. The proposal also would allow DHS to disclose more information about withholds that is now classified as confidential.
What DHS proposed and lawmakers discussed
- Payment withholds: DHS said current law allows withholds when there is a credible allegation of fraud, but officials told the committee that clarifying and broadening statutory authority would close legal gaps and make agency actions more defensible in court.
- Transparency of investigations: DHS asked the Legislature to allow the department to publicly state when it has issued a payment withhold, mirroring the existing authority to disclose the existence of an investigation.
- Anti-kickback expansion: DHS recommended making certain kickbacks actionable at the state level. Commissioner Gandhi told lawmakers she supports Minnesota joining the 36 states that have explicit anti-kickback statutes, saying the change would give prosecutors and DHS stronger tools against inducements to enroll or steer participants to services.
Committee members questioned whether courts had previously blocked withholds and whether existing federal law already addressed kickbacks. Gandhi said DHS would provide more detail on past court decisions if available; she also noted that federal law outlaws kickbacks but that a state statute can fill enforcement gaps when only a kickback — absent clear billing fraud — is suspected.
Concerns and follow-ups: Vice Chair Anderson asked for examples and urged stronger state action; several legislators asked DHS to return with specific language and with data on how many payment-withhold actions have been reversed by the courts. DHS said it would need to consult legal staff to answer whether any court had ordered payments to continue despite fraud allegations.
Ending: DHS said it will present the governor’s anti-fraud package to relevant committees in coming weeks and requested legislative partnership on precise statutory language to strengthen withhold authority and anti-kickback enforcement.
