Committee lays over bill to recodify Medicaid sanction rules and add expedited review
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Summary
House File 4068 reorganizes and updates statutory language governing Medicaid (MA) sanctions and, with an A1 amendment, adds an expedited administrative-review process, 90-day review milestones, and legislative notification requirements; witnesses said the changes add needed due process for providers affected by temporary payment withholds.
Chair Noor moved House File 4068 and asked nonpartisan staff to summarize the bill, which recodifies and reorganizes statutes governing Minnesota Medicaid sanctions (including 256B.064), updates terminology, and clarifies how withholding, suspension and termination authorities apply to MA programs.
The A1 amendment was presented to add a mechanism for an entity subject to a temporary payment withhold to request an expedited administrative-law-judge review; it also requires the commissioner to review sanctions at least every 90 days and mandates legislative notification if a withhold or suspension extends 180 days. Chair Noor said the amendment codifies timelines and federal coordination requirements.
Matthew Bergeron, a health-care attorney from Larkin Hoffman testifying in an individual capacity, told members that temporary payment withholds have historically lacked an effective review path and can continue for months or years, sometimes causing agencies to close even when later exonerated. "In my practice, I have represented agencies that have had their payments shut off... 12 months later, they get a letter that says we've completed a review. No fraud. You can go back to billing. And by that point, the agency is long since gone," Bergeron said.
Bergeron and staff emphasized the need to balance program-integrity tools — fines, recoupment authority, termination and criminal prosecution — with safeguards that allow providers to seek a timely review of temporary withholds. The committee also discussed federal 'good cause' exemptions that allow temporary releases of funds or partial payments to avoid immediate disruption of care, particularly in rural areas where alternatives are distant.
Members asked whether the amendment creates procedural loopholes or impedes criminal prosecutions; nonpartisan staff and Bergeron said the A1 amendment does not affect the department's authority to pursue permanent sanctions, civil recoupment or criminal charges, but provides an administrative-review path specific to temporary withholds.
Chair Noor renewed the motion to lay HF 4068, as amended, over for possible inclusion; the committee laid the bill over.