DHS outlines program-integrity push for Minnesota Medicaid, cites new tools and authority

The Minnesota Department of Human Services on Tuesday told the House Human Services Finance and Policy Committee it is moving to strengthen program integrity across Medicaid, combining prevention, detection and enforcement to limit improper payments and protect services for recipients.

For the record, Christy Grama, director of state government relations at DHS, told lawmakers ‘‘Medicaid is really a lifeline in Minnesota’’ and that the agency covers more than 1,000,000 recipients. She said strengthening program integrity protects children, seniors and people with disabilities who rely on Medicaid services.

DHS described a package of actions already taken and planned. Among measures the agency listed: designating 13–14 Medicaid service types as high risk; implementing prepayment review earlier this year to flag potentially improper claims; a large-scale disenrollment last October of roughly 100,000 individual providers and 761 agencies identified as inactive; and a set of executive and statutory tools passed in 2025 that expand the department’s authority to share claims data and disclose payment withholds when doing so will not compromise investigations.

Grama said DHS is rolling out new data-analytics tools and ‘‘expanded unannounced on-site visits’’ to detect anomalies, while stressing that automated tools need human oversight to avoid bias. She also described the department’s ‘‘four pillars’’ for the work—transparency, prevention, detection and enforcement—and pointed members to a newly published DHS dashboard that lists open cases and administrative actions.

Legal and procedural changes the department cited include a state anti-kickback prohibition added to Minnesota’s criminal code (chapter 609) to make prosecutions easier in some fact patterns, statutory authority to disclose some payment withholds, changes to surety-bond statute of limitations to improve collections, and a licensing fee increase effective Jan. 1, 2026. Grama said DHS has used new authority to deny licensure applications or temporarily suspend licenses when providers are subject to active investigations.

Behavioral-health changes from last session were also detailed. Grama said the state clarified the federal ‘‘midpoint rule’’ to prevent double-billing for time-based codes; she described a transition from the term ‘‘sober homes’’ to ‘‘recovery residences’’ with a voluntary certification aligned with national standards and effective Jan. 1, 2027; and she said a freestanding room-and-board funding mechanism will phase out July 1, 2027 with housing supports available to eligible recovery residences. DHS also plans a State Plan Amendment (SPA) to disaggregate certain substance use disorder billing codes into 15-minute units, with a planned public comment period and a July 1, 2026 implementation target.

Grama cautioned that identifying fraud precisely is difficult until cases are prosecuted and that reported totals circulating publicly are often unverified. ‘‘People can throw out numbers if they want, but it doesn't make them true,’’ she told the committee, describing a shift from tip-driven inquiries toward proactive analytics as DHS expands resources.

The department described an internal process for escalating credible allegations of fraud—investigator review, supervisory and attorney review, and Inspector General sign-off—and said that once the department meets the legal definition of a credible allegation, imposing a payment withhold can occur ‘‘within a couple of weeks.’’ DHS said it works with counties and a complex-transitions team to reduce risk of service or housing disruption for affected individuals.

The committee asked DHS for continued updates and noted that multiple statutory and administrative steps will require monitoring as implementation continues.

Minutes: the committee approved the minutes of Feb. 18, 2026, by voice vote earlier in the session.

What’s next: DHS invited lawmakers to review its dashboard and announced additional implementation work and vendor procurement for some programs.