State officials dispute federal claims of inadequate anti-fraud efforts and warn cuts could destabilize health care for 1.2 million Minnesotans<\/p>\n
ST PAUL, Minn. \u2014 Minnesota is pushing back against the federal government\u2019s threat to cut more than $ 2 billion in Medicaid funding to the state’s social service programs. The MN Department of Human Services (DHS) filed an appeal Tuesday, calling the potential funding loss “catastrophic” for vulnerable Minnesotans.\u00a0<\/p>\n
“Unfortunately, CMS’ recent decision to withhold Medicaid funds is putting the people whom both agencies are sworn to serve at risk,” said Temporary Commissioner Shireen Gandhi in a press briefing. “Minnesota cannot absorb the loss of more than $2 billion in annual funding for these programs without catastrophic consequences for the people we serve.” \u00a0<\/p>\n
\n
\n <\/p>\n
The appeal is in direct response to an announcement on X<\/a> by Dr. Mehmet Oz, administrator for the Centers for Medicare & Medicaid Services (CMS) last week, stating CMS will defer all payments to 14 MN Medicaid programs and audit billing receipts<\/a> in the wake of rampant fraud concerns. \u00a0<\/p>\n But state officials maintain the unprecedented funding cut is punitive, not corrective, and would destabilize health care across Minnesota, particularly for low-income families, people with disabilities, and children.\u00a0<\/p>\n “Cutting off funding that is essential to health care without full review of the facts would be disastrous for 1.2 million Medicaid members in Minnesota, almost half of them children,\u201d said John Connolly, DHS deputy commissioner and Minnesota Medicaid director.\u00a0<\/p>\n “It is hard to overstate the impact,” Gandhi said.\u00a0<\/p>\n Watch the state’s full announcement: HERE<\/a><\/p>\n For years, KARE 11\u2019s investigations have documented fraud and systemic failures<\/a> inside state-funded social service programs<\/a> – particularly within Medicaid – where weak oversight allowed bad actors to exploit programs<\/a> designed to help people struggling with addiction<\/a>, homelessness<\/a>, and living with disabilities<\/a>. \u00a0<\/p>\n KARE\u2019s \u201cHousing Hustle\u201d investigation<\/a> exposed massive, organized fraud schemes within Minnesota\u2019s Housing Stabilization Services (HSS) program – a Medicaid-funded safety net meant to help people with disabilities and those facing homelessness find and keep housing<\/a>. \u00a0<\/p>\n KARE\u2019s reporting uncovered forged documents, falsified service notes,<\/a> kickbacks, and criminal networks of fly-by-night companies siphoning what federal prosecutors now believe to be hundreds of millions of dollars<\/a> for housing help never provided, including for clients who were already dead<\/a>, all while state regulators repeatedly failed to act in a timely manner. \u00a0<\/p>\n