Inspections and disenrollment: Update on Minnesota's Medicaid fraud effort
The latest on Minnesota's Medicaid fraud prevention
The State of Minnesota is making a massive effort to review Medicaid service providers in the state to prevent fraud. FOX 9's Rob Olson has the latest.
ST. PAUL, Minn. (FOX 9) - A massive effort to review nearly 6,000 Medicaid service providers in Minnesota got underway three weeks ago.
The review is required by the Trump Administration, which froze $2 billion in funding in early January, citing concerns of wide-scale fraud in state programs.
After a back and forth over the action plan, Minnesota’s approach was finally approved by the White House on March 19.
Starting over
What we know:
Minnesota has 5,583 service providers across 13 programs labeled as high risk for fraud.
The review, called "Minnesota Revalidate," requires all of them to start from scratch. They must reapply and only once their paperwork is thoroughly vetted will they get an unannounced site inspection.
And all of it has a fast approaching deadline.
"Our goal is that by May 31st, we will have contacted every provider to let them know their continued participation is either approved, pending or they have been dis-enrolled," said Minnesota’s Medicaid Director John Connelly.
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The work so far
By the numbers:
So far, the state has worked through a little more than half of those nearly 6,000 providers.
Only 550 have had applications approved, site inspections completed and been re-enrolled. 1,510 applications are incomplete. Those providers now have 30 days to fix their paperwork or be kicked out of participating. 160 have already been dis-enrolled, but mostly because they’ve been inactive and haven’t replied to state inquiries.
"The main reason for these is non-response," said Connelly.
"And the providers that have been dis-enrolled for non-response so far have largely been non-billing providers. We haven’t received any claims from them in over a year."
And there are 990 who have been submitting claims, but also have not responded to state notices. They’ve received at least three written notices and two phone calls. The state has begun the process of dis-enrolling these providers, as well.
Looming deadline
What's next:
As Connelly noted, the goal is to finish this by the end of May. The number above accounts for just over half the 5,800 providers being revalidated or dis-enrolled.
The state is also fighting another federal funding freeze: $259 million in reimbursements for claims already paid by the state in late 2025.
The state sued the Trump Administration, seeking a temporary restraining order to force those funds to be paid.
This week, a federal judge denied that, noting that the state made reasonable claims, but did not provide enough evidence to support a restraining order.
That legal battle will continue.