Coon Rapids MN
7-16-2026 11:18pm

MINNEAPOLIMEDIA NEWS | Minnesota Extends Medicaid Provider Enrollment Freeze as Fraud-Prevention Reviews Continue

ST. PAUL, MN (July 17, 2026) Minnesota will continue blocking most new providers from enrolling in 12 Medicaid service categories considered vulnerable to fraud, waste or abuse, extending a temporary moratorium for another six months while state officials work through thousands of provider appeals and outstanding verification issues.

The Minnesota Department of Human Services announced Wednesday that the extension will run from July 27, 2026, through Jan. 27, 2027. The federal Centers for Medicare & Medicaid Services approved the state’s request to continue the enrollment restriction.

The moratorium applies to providers seeking to enroll in Minnesota Health Care Programs, the umbrella through which the state administers Medical Assistance, Minnesota’s Medicaid program.

The extension does not prevent eligible Minnesotans from enrolling in Medicaid or receiving covered services. Existing providers that remain properly enrolled may continue serving patients and billing the program.

“We still have a lot of work to do to verify the providers we have before we begin accepting new applications,” DHS Temporary Commissioner John Connolly said in announcing the extension.

Connolly said the department is working with providers, counties and managed care organizations to protect access for people who rely on the affected services. DHS may seek exceptions to the moratorium when additional providers are needed to prevent a service shortage.

Twelve Service Areas Remain Under the Freeze

The extended moratorium covers the following high-risk Medicaid service categories:

  • Adult companion services
  • Adult day services
  • Adult rehabilitative mental health services
  • Assertive community treatment
  • Community First Services and Supports
  • Individualized home supports
  • Integrated community supports
  • Intensive residential treatment services
  • Night supervision services
  • Nonemergency medical transportation
  • Recovery peer support
  • Recuperative care

The state originally froze enrollment in 13 categories on Jan. 30. Early Intensive Developmental and Behavioral Intervention, or EIDBI, is not included in the new six-month extension. The existing pause for that autism-related service is scheduled to end Oct. 31, 2026.

Housing Stabilization Services is also classified by DHS as a high-risk area, but Minnesota ended that Medicaid benefit on Oct. 31, 2025, amid extensive concerns about fraud and rapidly rising costs.

Revalidation Review Reached May Deadline

The enrollment freeze began as DHS launched Minnesota Revalidate 2026, an accelerated examination of providers operating in high-risk service areas.

The state completed initial revalidation determinations for 5,583 providers by the federally imposed May 31 deadline. The work required providers to document their ownership, controlling interests, key employees, business locations, licensing, insurance, training and other qualifications.

Providers were also subject to fingerprint-based background studies where required and unannounced site visits intended to determine whether their operations matched the information submitted to the state.

DHS reported that 2,061 providers were approved through the initial review and permitted to continue participating in Medicaid without interruption.

Another 3,411 providers received notices that they would be disenrolled:

  • 2,491 submitted incomplete or inaccurate administrative information.
  • 916 did not pass site-visit verification.
  • Four failed required background studies.

An additional 111 providers were removed from the review because they were no longer delivering a high-risk service. DHS referred 59 providers to its Office of Inspector General for further examination.

Receiving a disenrollment notice does not necessarily mean DHS determined that a provider committed fraud. Many notices resulted from missing documents, undisclosed changes in ownership or management, expired credentials, insufficient proof of insurance or discrepancies between an application and what inspectors found at a business location.

Providers generally have 60 days to appeal. As of June 9, DHS had recorded 2,055 appeals, leaving the agency with a substantial body of cases to review after completing its initial determinations.

Providers that appeal and submit the required supporting information may have their billing privileges restored when necessary to maintain continuity of care.

What Providers Must Demonstrate

To complete revalidation successfully, a provider must give DHS current and verifiable information about the people and facilities behind the operation.

Required materials may include:

  • Ownership and controlling-interest disclosures
  • Business addresses and contact information
  • Current professional or program licenses
  • Proof of liability insurance and surety bonds when applicable
  • Staff qualifications and required training
  • Evidence that the provider has enough qualified workers to deliver the service
  • Background-study information for owners and other required individuals

DHS said a provider’s submitted information must be confirmed during an unannounced inspection.

“The paperwork is a critical step,” DHS Deputy Commissioner Shireen Gandhi said when the department released its initial revalidation results in June. “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.”

Exceptions Possible When Access Is at Risk

Although the moratorium generally prevents new provider enrollment, it is not intended to leave Medicaid recipients without necessary services.

DHS said it will monitor service availability with counties, Tribal governments and managed care organizations. An exception may be considered where the state determines that additional capacity is necessary.

Under the federally approved moratorium, an exception generally requires the state to demonstrate the access need and obtain written approval from CMS.

That provision could be particularly important in rural communities or specialized service areas where only a small number of qualified providers are available.

Counties, Tribes and managed care plans are also responsible for helping recipients locate another provider if their former provider is disenrolled.

Enrollment Freeze Is Separate From Licensing Moratoriums

The six-month Medicaid enrollment extension is separate from two longer state licensing restrictions.

A two-year freeze on new adult day center licenses took effect Feb. 1, 2026, and is scheduled to continue through Jan. 31, 2028.

Minnesota also has a moratorium on new licenses for certain home- and community-based services through Dec. 31, 2027.

Licensing and Medicaid enrollment are distinct. A license authorizes an organization to operate a particular kind of service, while Medicaid enrollment authorizes it to bill Minnesota Health Care Programs for covered care.

Depending on the service, an organization may need both before it can serve Medicaid recipients and receive public reimbursement.

More Than $2 Billion in Federal Funding at Stake

The review is a central component of a corrective action plan negotiated between Minnesota and CMS after federal officials raised concerns about the state’s Medicaid program-integrity safeguards.

CMS notified Minnesota in January that it considered the state’s initial response deficient and intended to withhold more than $2 billion in federal Medicaid funding annually until specified conditions were met. Minnesota disputed aspects of the federal decision and appealed while submitting a revised corrective action plan on Jan. 30.

CMS approved the revised plan in March. Its largest operational requirement was the accelerated revalidation of providers in the designated high-risk service areas.

DHS has said the potential loss of federal funding could affect the state budget and jeopardize care for approximately 1.3 million Minnesotans who depend on Medicaid.

Completing the May 31 determinations satisfied an important deadline, but it did not end the broader dispute over federal funding or the state’s responsibility to resolve appeals, verify provider information and strengthen ongoing oversight.

Part of a Broader Medicaid Crackdown

Minnesota has expanded its Medicaid fraud-prevention work since 2024 following investigations involving several publicly funded human-services programs.

In addition to provider revalidation and enrollment restrictions, DHS has reported:

  • Increased use of unannounced inspections
  • Expanded review of claims before payment
  • More intensive screening of providers classified as high risk
  • Greater use of billing analytics to identify unusual patterns
  • Increased oversight of managed care organizations
  • Removal of inactive providers from the Medicaid enrollment system
  • Referrals of suspected criminal conduct to the Minnesota Attorney General’s Medicaid Fraud Control Unit and federal law-enforcement agencies

Between October 2025 and March 2026, DHS terminated more than 18,000 provider records that had not billed Medicaid during the previous year. The department said removing inactive records gives investigators a clearer picture of the active provider network and makes suspicious activity easier to detect.

The department currently oversees more than 313,000 Medicaid provider records across 87 provider types, ranging from hospitals and nursing facilities to mental-health centers and community-based support agencies.

DHS does not prosecute criminal fraud cases. When its investigators identify credible allegations of fraud, cases may be referred to the Minnesota Attorney General’s Office, the U.S. Attorney’s Office, the FBI or other law-enforcement agencies.

What the Extension Means for Minnesotans

For Medicaid recipients, the moratorium does not cancel coverage or prohibit continued care from a properly enrolled provider.

However, the continued restriction could limit the number of new agencies entering affected service areas. It may also place additional pressure on existing providers if dis-enrollments reduce service capacity, particularly in communities already experiencing shortages of transportation, disability support, mental-health or home-based care.

DHS said it will continue working with local governments, managed care plans and providers to identify access problems and consider exceptions when necessary.

For prospective providers, the extension means most new applications in the 12 affected categories will remain blocked through Jan. 27, 2027, unless the state and CMS approve an exception.

For existing providers involved in the appeals process, the coming months will determine whether they can demonstrate compliance and remain enrolled in Minnesota’s Medicaid system.

Sources

MinneapoliMedia | Community. Culture. Civic Life.

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