3,411 Minnesota Medicaid Providers Face Disenrollment After State Review

ST. PAUL, MN — More than 3,400 high-risk Medicaid providers in Minnesota face disenrollment after a statewide review tied to the state’s effort to protect up to $2 billion in federal Medicaid funding, officials said Thursday.

The Minnesota Department of Human Services said it completed a five-month review of 5,583 high-risk Medicaid providers by May 31.

The deadline was a key part of Minnesota’s plan to stop the federal government from withholding Medicaid money after state and federal officials raised concerns about provider oversight.

The review required providers to prove they still met heightened legal, licensing, and eligibility standards to operate and serve vulnerable Minnesotans, according to DHS.

"More than 1 million Minnesotans deserve to have confidence and trust in the Medicaid providers they depend on for lifesaving and life-affirming care," Deputy Commissioner Shireen Gandhi said in a statement.

"We are grateful to the providers who successfully completed the revalidation process and will continue to provide quality care."

Here’s what DHS found:

• 2,061 providers were revalidated and can keep providing Medicaid services without interruption.

• 3,411 providers were notified they will be disenrolled.

• 111 providers were removed from the review because they are no longer providing a high-risk service.

• 59 providers were referred to the DHS Office of Inspector General for further review.

Among the providers facing disenrollment:

• 2,491 submitted incomplete paperwork or documentation.

• 916 failed verification during site visits.

• 4 failed background studies.

"The paperwork is a critical step," Gandhi said. "This is just not checking the box. DHS uses the information to check requirements are met. And when we go on site what we see must match what was submitted to us."

DHS said common reasons for disenrollment notices included failure to disclose management authority or report a change in ownership; failure to report changes in or maintain proper credentials, such as liability and surety bonds; failure to provide access; and incomplete applications.

The state stops payments to providers who receive disenrollment notices. Providers have 60 days to appeal.

If a provider appeals and submits the required documentation, the state may reinstate the provider’s ability to bill Medicaid to help maintain continuity of care, DHS said.

The review means some Minnesotans may need to change how they access Medicaid services.

DHS said it has been working with counties, Tribes and managed care plans to make sure they know which providers were disenrolled. Those agencies will be responsible for helping clients find new providers if necessary.

The department is also contacting Minnesotans who do not have case managers and who receive services from providers that may be disenrolled.

“Minnesota counties are the first point of contact for most Minnesotans who receive Medicaid services, so while the revalidation process has been a state responsibility, counties are actively responding to questions from clients and even providers who have been disenrolled,” Julie Ring, executive director for the Association of Minnesota Counties, said in a statement.

DHS described the review as part of a broader effort to strengthen Medicaid oversight and rebuild public trust.

Newly signed legislation will increase staffing for the DHS Office of Inspector General, create a new statewide Office of Inspector General to oversee all agencies, and provide funding to expand the Minnesota Attorney General’s Medicaid Fraud Control Unit, according to the department.

"Minnesotans deserve to trust that businesses receiving Medicaid dollars are legitimate and properly credentialed, and that they provide quality care," Human Services Inspector General James Clark said in a statement. "We’re not just resetting expectations for providers, we’re also establishing a baseline for building back public trust."

DHS said the revalidation effort builds on other steps to tighten Medicaid oversight, including enhanced pre-payment review for high-risk providers, a temporary freeze on new provider enrollment in high-risk programs, and auditing and provisional licensure for autism service providers.