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DHS corrects decade‑long funding error for seven tribal residential SUD providers; forecast adds $113M state charge
Summary
DHS told the House committee that seven tribal residential substance‑use disorder providers had been reimbursed with federal funds since 2015 despite being institutions for mental disease (IMDs) and therefore ineligible for federal reimbursement; the February forecast shifts $113 million to state funds to correct the error.
Department of Human Services officials told the House Human Services Finance and Policy Committee that a decade‑long funding error led to federal funds being used to reimburse services provided by seven tribal residential substance‑use disorder (SUD) providers that DHS now classifies as institutions for mental disease (IMDs), which are not eligible for federal reimbursement in most cases.
DHS staff said the issue was discovered in December 2024 and that the providers — all operated by tribal governments — had been submitting legitimate claims that were paid at the correct encounter rates. The department said the…
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