MN fraud: Medicaid providers face removal as validation deadline passes

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) - Sunday was the deadline for Minnesota to complete the revalidation of thousands of Medicaid providers in "high-risk" programs as the state fights with the federal government over about $2 billion in funding.

What is Minnesota Revalidate?

The backstory:

Earlier this year, state leaders announced an effort to revalidate more than 5,500 providers in Minnesota's Health Care Programs. The revalidation was part of an effort to combat fraud and to satisfy demands from the federal Centers for Medicare and Medicaid Services, which has withheld up to $2 billion in Medicaid funds from Minnesota.

The deadline to finish the revalidation was on Sunday, May 31.

What we know:

As of last month, state officials said only 550 providers have had applications approved, site inspections completed and been re-enrolled.

At that point, 1,510 applications were incomplete, and 160 providers had been disenrolled. State officials said mostly because they had failed to respond to state inquiries.

There were an additional 990 who had been submitting claims but failed to respond to state notices.

Medicaid funding lawsuit

Local perspective:

In January, Medicaid Administrator Dr. Mehmet Oz announced the Centers for Medicare and Medicaid Services would withhold $2 billion in Medicaid funding for Minnesota.

The decision followed an audit by the centers of Minnesota's Medicaid programs. The funding suspension also followed a new batch of federal Medicaid fraud charges that came down in December. During a news conference, as prosecutors announced new charges and guilty pleas related to fraud, federal prosecutors estimated that fraud in Minnesota's Medicaid programs could total as high as $9 billion since 2018.

The other side:

Since that press conference, the $9 billion figure has been heavily disputed by state leaders who say there is currently no evidence that fraud in Minnesota is that rampant. Gov. Walz and other state leaders say that while fraud is an issue, President Trump has weaponized it to commit political retribution against the state.

What's next:

FOX 9 has reached out to state officials to see how many providers are facing disenrollment as the deadline hits on Sunday.

Earlier this year, Attorney General Keith Ellison filed a lawsuit over the pulled Medicaid funds. This month, a judge granted a mutual motion for a stay in the case – a 120 pause – to give the federal government and Minnesota time to resolve the funding issue. An update is due to the court by early September.